Law: Income Tax Act, 1961

Section: 256,80-HH.

Income-tax---New industrial undertaking in backward area---Special deduction--Computation of special deduction---Special deduction to be calculated on net income after deduction of depreciation, development rebate, etc.---Indian Income Tax Act, 1961, S.80-HH. If section 80-HH of the Income Tax Act, 1961, is read with section 80-AB of the Act then it is clear that for the purpose of determination of the relief under section 80-HH of the Act, the gross total income of the assessee has to be worked out after deducting unabsorbed loss and unabsorbed depreciation and the income eligible for deduction under section 80-HH will be the net income as computed in accordance with the provisions of the Act and not the gross income. C.I.T. v. Vishnu Oil and Dal Mills (1996) 218 ITR 71 Raj.) fol. JUDGMENT B. R. ARORA, J.---The Income-tax Appellate Tribunal , Jaipur Bench, Jaipur, for the assessment year 1975-76, at the instance of the Revenue, has referred the following question of law for the opinion of the High Court under section 256(1) of the Income Tax Act, 1961. "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in confirming the Commissioner of Income-tax (Appeals) direction that the amount of 20 percent has to be calculated with reference to the profit and loss account of the assessee and deductions on account of depreciation, initial or additional depreciation, development rebate, investment allowance, adjustment on account of unabsorbed depreciation; additional depreciation, investment allowance, development rebate, etc., are not to be adjusted at all and agreeing with the Income-tax Officer in allowing deduction under section 80-HH with reference to profit as per profit and loss account of the assessee. They further erred in quashing the order passed by the Commissioner of Income-tax for the assessment year 1980-81?" An identical question came up for consideration before the Division Bench of this Court in D.B. Income-tax Reference No. l of 1991 (C.I.T. v. Vishnu Oil…

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