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2013 (5) TMI 152 - HC - Income TaxMethod of computation of deduction U/s 80HHC - Whether the deduction claimed by the assessee U/s 80HHC of the Act should have been given first and then the adjustments of unabsorbed depreciation should have been taken place - Held that:- The decision of the Supreme Court in the case of IPCA Laboratory Ltd. v. Dy.(2004 (3) TMI 9 - SUPREME Court) and this decision had been followed by the Madhya Pradesh High Court in the case of VIPPY Solvex Products Ltd. v. CIT (2004 (11) TMI 31 - MADHYA PRADESH High Court) opined that the unabsorbed depreciation and carried forward losses of the earlier year should be first factored in while arriving at the taxable income and as against balance available, the benefit of deduction under section 80HHC of the Act can be claimed. We having noticed the ratio of the Supreme Court in the Judgments referred to above, that deduction can be claimed only against positive profits and positive profit necessarily implies the adjustments and set off of the depreciation allowance of earlier years and carried forward losses of earlier years and that Judgment having the binding effect on this court, it has to be necessarily ruled that the benefit under section 80HHC of the Act can be claimed only after the unabsorbed depreciation of the earlier years is adjusted against the profits of the current year and then only the benefit extended under section 80HHC of the Act can be given effect to. Tribunal was correct in taking the view that the Appellate Commissioner was not justified in reversing the view taken by the Assessing Officer and the order of the Tribunal is proper, does not suffer from any error of law and therefore we answer the questions posed in the affirmative to hold that the Tribunal was correct in taking the view that the assessee was not entitled to claim the benefit of deduction even before adjusting unabsorbed depreciation of the earlier years - Revenue's appeal is dismissed.
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