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2012 (9) TMI 162 - HC - Income TaxDeductions under Section 80HH/80IA on the profits of each unit separately - Held that:- On perusal of the bare provisions of the Act it is clear that while calculating deductions under Chapter VI-A only the profits derived from priority units are to be taken into consideration. Section 80A(2) specifically provides that the amount of deduction shall not in any case exceed the gross total income of the assessee. There can be no manner of doubt that Section 80AB has overriding effect and will govern the other provisions of Chapter VI-A. This also clearly indicates that only the income derived from a priority undertaking is to be taken into consideration while making deduction. Section 80B(5) indicates that gross total income means the total income computed in accordance with the provisions of this Act. Therefore, we are of the considered view that the phrase “gross total income” will include profits and losses from other units whether they be priority units or non-priority units. The Legislature by using the phrases “total income” and “gross total income” has tried to differentiate between the two as Gross total income has been defined to mean the total income computed in accordance with the provisions of this Act. Therefore, it will include the profits and losses of all units of the assessee whether they be priority units or non-priority units. However, while computing the deductions specified under Section 80C to 80U only the income derived from the priority units has to be taken into consideration. The deductions shall be calculated only in respect of the income whether profit or loss of the priority unit(s) - If the gross total income is nil, then as laid down in Synco Industry [2008 (3) TMI 13 - SUPREME COURT] the assessee cannot get any benefit of such deductions. Section 80A(2) leaves no manner of doubt that the amount of deductions cannot exceed the gross total income of the assessee.
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