Law:

Section:

Section 80A, read with section 80B, of the Income-tax Act, 1961 - Deductions - General - Assessment year 1995-96 - Whether provisions as provided under section 80A, read with section 80B, will have an overriding effect over all other sections in Chapter VI-A - Held, yes - Whether as per mandate contained in sections 80A and 80B(5), gross total income should be computed after setting off brought forward business loss and unabsorbed depreciation, etc., for allowing deductions specified under sections 80C to 80U - Whether, therefore, where gross total income was shown as nil, there was no question of allowing deduction to assessee under sections 80-I, 80-IA, 80HH and 80HHD - Held, yes Section 80-IA of the Income-tax Act, 1961 - Deductions - Profits And Gains of Infrastructure Undertakings - Whether non obstante clause in section 80-I(6) cannot restrict sections 80A(2) and 80B(5) - Held, yes FACTS The assessee-company carried on various businesses, i.e., construction activity, cement production, running hotels at Lucknow and Nainital. For the relevant assessment year, it filed its return of income after setting off the brought forward losses of earlier years against the current year's income. As the gross total income defined under section 80B(5) was a loss, the assessee's claim for deductions under sections 80HH, 80HHD and section 80-I were not allowed by the Assessing Officer. On appeal, the Commissioner (Appeals) allowed the deduction under section 80-I to the extent of unabsorbed depreciation relating to hotel divisions brought forward from the earlier years, but upheld the disallowance of deduction under sections 80HH and 80HHD. However, on second appeal, the Tribunal allowed full relief to the assessee. On the revenue's appeal to the High Court, the assessee contended that the non obstante clause in section 80-I(6) excludes the application of any other section and the artificial presumption created by section 80-I(6) precludes the assessing authority from taking into consideration the losses incurred in the other units and the unabsorbed losses the previous years and even assuming that sections 80A and 80B(5) are to be read in a manner that the deductions…

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