Law:

Section:

Section 80-IA of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial undertakings, etc., after certain dates - Assessment year 1997-98 - Whether quantum of deduction under section 80-IA is not dependent upon assessee claiming or not claiming depreciation, because under section 80-IA quantum of deduction has to be determined by computing total income from business after deducting all deductions allowable under sections 30 to 43D - Held, yes FACTS In its return of income, the assessee computed total income without claiming depreciation, on which 100 per cent deduction was claimed by it under section 80-IA. However, the Assessing Officer computed the gross total income after deducting the current depreciation allowable under section 32 on the ground that 100 per cent deduction under section 80-IA was liable to be determined on the gross total income computed after deducting all deductions allowable under sections 30 to 43D. On appeal, the Commissioner (Appeals) directed the Assessing Officer not to deduct current depreciation in computing the gross total income. On the revenue's appeal, the Tribunal set aside the order of the Commissioner (Appeals) and restored the order passed by the Assessing Officer. On appeal to the High Court, the assessee contended that when the current depreciation was not claimed by it, thrusting of current depreciation upon it in computing taxable income was unjustified. The appeal was initially heard by a Division Bench of the High Court which observed that on the question under consideration there were conflicting decisions rendered by the two Division Benches of the Court in the case of Grasim Industries Ltd. v. CIT [2000] 245 ITR 677/[2001] 115 Taxman 278 (Bom.) and in the case of Scoop Industries (P.) Ltd. v. ITO [2007] 289 ITR 195/ 161 Taxman 366(Bom.). On the request of the Division Bench, the Chief Justice had constituted the Full Bench for resolving the controversy in question. HELD In the light of various decisions of the Apex Court, it is clear that section 80-IA is a code by itself and the deduction allowable under section 80-IA is a special deduction which is linked to the profits, unlike deductions…

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