TMI Blog2012 (9) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... If one examines the scheme of Chapter XIV, it becomes clear that the said Chapter not only deals with assessment and re-assessment, it also deals with re- computation. The object of re-computation is to assess (quantify) the correct taxable income. Such re-computation of a correct taxable income is a matter of procedure. In order to arrive at a correct amount of taxable income, DCIT had to compute deduction u/s 80HHC(3) which had to be deducted from the gross total income - Decided against assessee - CIVIL APPEAL NO. 6757 OF 2012 - - - Dated:- 19-9-2012 - S.H. KAPADIA and MADAN B. LOKUR, JJ. Ajay Vohra and Ms. Kavita Jha for the Petitioner. Rajiv Dutta, Rahul Kaushik, Ms. Niranjana Singh and Ms. Anil Katiyar for the Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income, the Dy. C.I.T. reduced the deduction admissible under Section 80HHC to Rs. 40,08,528/- as against deduction of Rs.1,14,45,297/- allowed in the original assessment order dated 29.1.1999 by reducing the unabsorbed depreciation and brought forward losses for the earlier assessment years 1990-91, 1991-92 and 1995-96 from current year's business profits for determining "profits of the business". Assessee assailed the order dated 28.7.2002 passed under Section 154 before the Tribunal. At this stage, an important fact needs to be mentioned. On July 28, 2002 an issue as to whether brought forward losses/unabsorbed depreciation could be set off from "profits of business", which had to be apportioned in the ratio of export turnover to total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of entitlement of the assessee. To that extent, according to the learned counsel, application of the assessee under Section 154 was maintainable and, that the Dy. C.I.T. to that extent, was right in computing gross total income for the assessment year in question. However, according to the learned counsel, the Dy. C.I.T. could not have undertaken the rectification (re-computation) of deduction under Section 80HHC(3) as on the relevant date (28.7.2002) there was a debate on the issue whether unabsorbed depreciation and brought forward business losses have to be reduced for calculating the "profits of the business" on which deduction under Section 80HHC(3) of the Act is calculated, by apportioning the same in the ratio of export turnover t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the Dy. C.I.T. had to give effect in toto to the orders passed by the Appellate Authority for earlier years as the Appellate Authority had directed the department to give benefit to the assessee of carrying forward and setting off losses/unabsorbed depreciation in the computation of taxable income. It is well settled that under Section 72, business loss can be carried forward and set off against business income for a period of eight years. Similarly, unabsorbed depreciation would be available for set off against all heads of income for unlimited period (indefinitely). Accordingly, the assessee had moved an application under Section 154. As stated, in the earlier years, the income of the assessee was assessed as loss. However, in the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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