2010 (3) TMI 1145 - HC - Income Tax

Summary

Issues Involved:
The appeal concerns the calculation of deduction u/s 80IA for Assessment Year 1998-99.

Details of Judgment:

Issue 1: Calculation of deduction u/s 80IA
The assessee claimed a deduction under Section 80IA for the Silvassa unit, returning a total income of Rs. 55.66 Crores with profits of Rs. 70.24 Crores. The Assessing Officer restricted the deduction to Rs. 56.54 Crores, based on the gross total income of Rs. 59.74 Crores after certain disallowances. However, the CIT(A) held that the deduction should be based on the gross total income as computed by the Assessing Officer. The Tribunal upheld this decision, citing a previous case for the same assessee. Section 80IA allows a deduction from profits and gains derived from eligible business, subject to the provisions of the Section and Chapter VIA. The Court found no justification for the Assessing Officer's limitation of the deduction to profits and gains of business only. Referring to a previous judgment, the Court ruled in favor of the assessee, stating that the deduction should be based on the gross total income as computed. The appeal was thus disposed of in favor of the assessee.

Conclusion:
The High Court of Bombay ruled in favor of the assessee, stating that the deduction u/s 80IA should be calculated based on the gross total income as computed by the Assessing Officer, rather than being restricted to profits and gains of business only.