Deduction u/s 80J - When the working of the unit or hotel or ship results in a loss, relief under section 80J will not be admissible for set off against positive income from any other source of income. - Income Tax - 561/CBDT

INSTRUCTION NO. 561/CBDT Dated : June 26, 1973 Section(s) Referred: 80J Statute: Income - Tax Act, 1961 The Board had occasion recently to consider a case where a deduction in respect of profits of a new industrial undertaking was allowed under section 80J of the Income-tax Act, 1961 even though the unit's working showed a loss. This has resulted in an objection from Revenue Audit. The Board have accepted the objection. 2. Section 80J relief applies only when and to the extent the gross total income includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel. When the working of the unit or hotel or ship results in a loss, relief under section 80J will not be admissible for set off against positive income from any other source of income. 3. If there is a deficiency consequent upon the calculation of relief under section 80J in respect of the entitled unit in above circumstances., it has to be carried forward under Section 80J(3). 4. These instructions may be brought to the notice of all officers working in the charge. A review of past assessments wherein relief. under section 80J has been wrongly allowed as above should be undertaken and necessary rectification/revision proceedings be immediately initiated.