TMI Blog2015 (9) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... e which is eligible for deduction in terms of Section 80IB(10) of the Act, therefore, only increases by said figure of disallowed expenditure. CIT (Appeals) has in this background referred to judgment in case of Shirke Constructions and Equipments Ltd (2000 (7) TMI 40 - BOMBAY High Court), wherein distinction between certain Sections of Chapter VIA, which refer to deduction out of gross total income and other sections of Chapter VIA, which do not make such reference to gross total income, has been explained. CIT (appeals) has correctly pointed out that the deduction allowable under Section 80IB(10) of the Act is with reference to the respondents gross total income. Hence, disallowance under Section 40[a] [ia] cannot be treated separately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The facts in brief are, that the assessee whose eligibility to claim deduction under Section 80IB (10) of the Income Tax Act, 1961 (hereinafter referred to as the Act for short), is not in dispute, filed a return in Assessment Year 2006-07 for accounting period 01.04.2005 to 31.03.2006, claiming deduction of ₹ 16,82,121/under that provision. It was taken up for scrutiny, and an order under Section 143(3) of the Act came to be passed, disallowing the expenses under Section 40[a][ia] of the Act for not deducting TDS at source. Thus, payment of ₹ 83,00,738/under the head Subcontract payment; ₹ 1,75,000/as Commission payments and ₹ 7,96,375/as Advertisement Payment was disallowed. 4. The Assessing Officer t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand states that in said matter decided by this Court, the assessee M/s. Shirke Constructions and Equipments Ltd., also had other sources of income, and hence application of mind therein needs to be understood properly. Here, the respondent assessee (Sunil Vishambharnath Tiwari) does not have any other source of income, except eligible business and this fact is not in dispute. Therefore, the deduction of payment made to contractor is out of eligible profits and even if ignored for the purpose of computing net income, it gets added only to the eligible income. Disallowance of expenditure only adds to it and that income does not become taxable. The fact that the assessee had filed 'nil' return, cannot be lost sight of. 7. Accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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