TMI Blog2007 (1) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier years should be set off while computing the profits of business for the purpose of determining the relief under section 80HHC? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal ought to have held that the entire amount receivable under an agreement for sale of goods should be treated as sale consideration for purposes of computing relief under section 80HHC? (iii) Whether, on the facts and in the circumstances of the case, the Tribunal erred in rejecting the ground raised by the applicant regarding computation of relief under the proviso to section 80HHC(3) in respect of incentives received by the applicant? (iv) Whether, on the facts and in the circumstances of the case, the Tribunal ought to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, given the scheme of section 80HHC, the profit under section 80HHC was not to be computed in a normal manner. The Tribunal rejected the contention, taking the view that in terms of section 80AB, the unabsorbed depreciation and the unabsorbed investment allowance were to be deducted from the profits and gains of the business for the purpose of determining the relief under section 80HHC. Thus, the Tribunal confirmed the orders of the authorities below. Aggrieved by the said view, the assessee preferred a petition under section 256(1) of the Income-tax Act, 1961, for referring the questions of law as stated above. The Tribunal, on the facts stated, referred the questions for the opinion of this court. Learned counsel appearing for the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HC alone will have its play. In the circumstances, he submitted the Bombay High Court decision will have to be applied to grant relief. Learned standing counsel for the Income-tax Department, however, placed strong reliance on the decision of the Supreme Court in IPCA Laboratory Ltd. v. Deputy CIT [2004] 266 ITR 521 and submitted that in view of the apex court decision overruling the Bombay High Court decision, the relief has to be worked out only as interpreted by the apex court and the reliance placed on the decision of the Bombay High Court is no longer maintainable in law. A perusal of the decision of the Supreme Court reported in IPCA Laboratory Ltd. v. Deputy CIT [2004] 266 ITR 521 shows that overruling the interpretation given on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the aggregate amount of the income under Chapter VI-A shall not exceed the gross total income of the assessee. Read in the context of section 80A and section 80AB, the scheme of deduction under section 80HHC has to be computed out of the income from profits and gains of business in accordance with the provisions of the Act, as stated so under section 80AB. A reading of this provision does not yield any other interpretation as suggested by the assessee. It is no doubt true that the facts of the case in the reported decision of the Supreme Court relates to a case of loss. Yet, it must be noted that the mandate of section 80AB is that it starts with the words "Where any deduction is required to be made or allowed under any section inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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