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Section 80-IA, read with section 80HHC, of the Income-tax Act, 1961 - Deductions - Profits and gains from infrastructure undertakings - Assessment year 1995-96 - Whether deduction under section 80-IA is to be allowed on gross total income even when deduction under section 80HHC was already claimed and allowed on said income - Held, yes FACTS The assessee-firm, an exporter, claimed deduction under section 80-IA and also deduction under section 80HHC. The ITO was of the view that once deduction under section 80HHC was allowed deduction under section 80-IA could not be allowed on the same gross total income. Therefore, the ITO allowed deduction under section 80-IA only on the balance amount, i.e., after deduction under section 80HHC. On appeal, the Commissioner (Appeals) affirmed the view taken by the Assessing Officer. On further appeal, the Tribunal held that the assessee was entitled to deduction under section 80HHC as well as section 80-IA on the gross total income. On appeal : HELD Section 80-IA does not provide that if deduction under section 80HHC has been allowed on gross total income, deduction under section 80-IA should be allowed only on balance income, i.e., amount remaining after deduction under section 80HHC. [Para 8] When there is no such provision or intention of the Legislature to allow deduction under section 80-IA on the balance amount, there is no justification to allow deduction under section 80-IA only on the balance amount, i.e., amount remained after deduction under section 80HHC. In the absence of such an intention, deduction under section 80-IA should also be allowed on gross total amount, as the words used in sub-section (1) of section 80A, for deduction are 'gross total income' and not on balance amount after any deduction made under any section. [Para 9] Consequently, instant appeal was to be dismissed. CASES REFERRED TO J.P. Tobacco Products (P.) Ltd. v. CIT [1998] 229 ITR 123 (MP) [Para 5] and CIT v. Chokshi Contacts (P.) Ltd. [2001] 251 ITR 587/[2002] 120 Taxman 1 (Raj.) [Para 6]. J.K. Singhi and Anurup Singhi for the Appellant. A. Kasliwal and Ashish Sharma for the Respondent. JUDGMENT 1. Heard learned counsel for the parties and…

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