TMI Blog1998 (2) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is entitled to carry forward the unabsorbed depreciation relating to the assessment years 1977-78 and 1978-79 ?" The assessment year with which we are concerned is the year 1979-80. The assessee is a firm of consultants which had received income by way of fees for work done outside India. Its claim before the Assessing Officer was for the deduction of the entire income received by it by way of fees from abroad, from its gross total income, and, therefore, of the amount of loss and unabsorbed depreciation for 1977-78 and 1978-79 and carry forward of the unabsorbed depreciation. The Income-tax Officer negatived the claim so made. The Commissioner of Income-tax on appeal and the Income-tax Appellate Tribunal, on further appeal, took the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cent. of such income. Section 80B of the Act defines some of the terms used in Chapter VI-A of the Act. "Gross total income" is defined as meaning the total income computed in accordance with the provisions of the Act before making any deduction under Chapter VI-A or under section 280-O of the Act. By the Finance (No. 2) Act of 1980, sections 80AA and 80AB were introduced. Section 80AA deals with the manner of computation of deduction under section 80M, while section 80AB deals with deductions to be made with reference to the income included in the gross total income for the purposes of two other sections in Chapter VI-A. Section 80AB provides that the amount of the income of the nature specified in the various sections in Chapter VI-A ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in accordance with the provisions of the Act, and not the gross amount received by way of dividends. The court expressly overruled the decision rendered by a smaller Bench in the case of Cloth Traders (P.) Ltd. [1979] 118 ITR 243 (SC). In the case of H. H. Sir Rama Varma v. CIT [1994] 205 ITR 433, the Supreme Court dealt with a case concerning the amount of relief properly admissible to the assessee under section 80T of the Act, which provision also occurs in Chapter VI-A of the Act. The court held that the deduction that can properly be claimed by the assessee under section 80T of the Act is the amount of the capital gains determined in accordance with the provisions of the Act after making such deductions as were permissible. The co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Act, that would be eligible for deduction. In the case of the assessee, the fee that it had received from abroad constituted its gross receipts from fees and the "income" from fees was required to be computed in accordance with the provisions of the Act, for deducting from the gross receipts, such amounts as were required to be deducted under the provisions of the Act, and it would only be the amount so determined that would constitute income from fees for the purpose of section 80-O of the Act. Unlike sections 80M and 80T, section 80-O of the Act uses the expression "whole of the income". Though the word "whole" apparently conveys an intention that the entire amount is to be deducted, having regard to the legislative ..... X X X X Extracts X X X X X X X X Extracts X X X X
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