Law:

Section:

Section 80-I of the Income-tax Act, 1961 - Deductions - Priority industries - Whether deduction under section 80-I should be allowed to an assessee in respect of its priority industry with reference to its total income after brought forward losses of earlier years were set off against positive profits of current year under section 72 - Held, yes - Whether unabsorbed depreciation or development rebate of earlier years was deductible from profits of current year in computing total income for purpose of deduction under section 80-I - Held, yes FACTS While computing the total income for the purpose of deduction under section 80-I, the assessee-company claimed that the setting off of the brought forward losses of the earlier years against the business profit of the current year under section 72, was not a process for computing total income and that the deduction should be allowed on its total income before the brought forward losses of the earlier years were set off. The assessee also claimed that the unabsorbed depreciation or development rebate of the earlier years was not deductible from the current year's business income while computing the total income for the purpose of deduction under section 80-I. The department disallowed the assessee's claims. On second appeal, the Tribunal held that the deduction under section 80-I should be allowed to the assessee on its total income as it stood before the brought forward losses of the earlier years were set off against the profits of the current year. The Tribunal also held that the unabsorbed depreciation or development was deductible from the profits of the current year while computing the total income and also the gross total income of the assessee for the purpose of determining the deduction allowable under section 80-I. On reference: HELD Following the decision in the case of CIT v. North Koshalpur Colliery Co. (P.) Ltd. [1986] 161 ITR 756/ 28 Taxman 240 (Cal.)in the instant case the deduction under section 80-I should be allowed to the assessee on its total income and gross income after the brought forward losses of the earlier years were set off against profits of the current year. The Tribunal was, therefore,…

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