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2014 (9) TMI 884 - HC - Income TaxAllowability of deduction on Gross total income or Net total income u/s 80HHC - Whether the Tribunal is correct in holding that the deduction U/s. 80 HHC to be allowed on the gross total income and not on net total income – Held that:- The gross total income is nothing but the total income, before any deductions under Chapter-VIA are made - If the Act provides for deduction of any amount from the gross total income, it is axiomatic that the deduction of that nature must take place at the first instance and thereafter, the other deductions can be made - once the deductions u/s 80-HHC are to be made from total income, there may not be any justification to insist that it shall be the first of all the deductions - If that were to be so, the Parliament would have employed the expression gross total income u/s 80-HHC also, instead of the expression total income. When the law requires that the deduction of the amounts are required to be made from the corresponding total income, the inescapable conclusion is that the deduction must take place, at the threshold, before the left over total income referable to that activity merges in the other head, of the income of the assessee – Relying upon Commissioner of Income-Tax Versus Shirke Construction Equipment Limited [2007 (5) TMI 194 - SUPREME Court] - once the deduction is to be made from total income, in contra distinction to gross total income, the assessee must be given the facility, as to the stage of deduction - Law provides the assessee, the freedom to arrange his affairs in a manner, which is beneficial to him, as long as the same is not prohibited by or is contrary to any provision of an enactment – Decided against the revenue.
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