Search Results Page
Search Results
1 - 8 of 8 (0.21 seconds)Section 80AB in The Income Tax Act, 1961 [Entire Act]
Section 80M in The Income Tax Act, 1961 [Entire Act]
Section 80T in The Income Tax Act, 1961 [Entire Act]
Section 256 in The Income Tax Act, 1961 [Entire Act]
H.H. Sir Rama Varma vs C.I.T on 2 November, 1993
5. Section 80HH of the Act deals with the deduction in respect of the profits and gains from newly established industrial undertakings or hotel business in backward areas and states that "where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking, or the business of a hotel, to which Section 80HH applies, there shall, in accordance with and subject to the provisions of Section 80HH, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to twenty per cent. thereof." This Section 80HH was inserted by the Direct Taxes (Amendment) Act, 1974 (Act No. XXVI of 1974). Section 80AB of the Act deals with the deduction to be made with reference to the income included in the gross total income and states that where any deduction is required to be made or allowed under any section (except Section 80M) included in this Chapter (Chapter VI-A) under the heading 'C'--"Deductions in respect of certain incomes" in respect of any income of the nature specified in that section which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section, for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with the provisions of this Act (before making any deduction under Chapter VI-A) shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income. This Section 80AB was inserted with effect from January 1, 1981. The position of law which stands after the insertion of Section 80AB is that the unabsorbed losses and unabsorbed depreciation had to be deducted before arriving at the figures that would be eligible for the purpose of deduction under Section 80HH and the amount of income computed in accordance with the provisions of the Act, i.e., the net income after making deductions, etc., shall alone be deemed to be the amount entitled for deduction under Section 80HH of the Act. The question : whether the provisions of Section 80AB are prospective or retrospective, came up for consideration before the Supreme Court in the matter of H.H. Sir Rama Varma v. CIT [1994] 205 ITR 433.
The Income Tax Act, 1961
Distributors (Baroda) Pvt. Ltd vs Union Of India And Two Ors on 1 July, 1985
The Supreme Court, on the parity of reasoning given in the case of Distributors (Baroda) P. Ltd. v. Union of India [1985] 155 ITR 120 (SC), held that (at page 440) : "Section 80AB was enacted to declare the law as it always stood in relation to the deductions to be made in respect of the income specified under the head 'C' of Chapter VI-A. The manner of deduction specified under Section 80AB accords with the interpretation that we have placed upon Section 80T read independently." If we read Section 80HH with Section 80AB of the Act then it is very much clear that for the purpose of determination of the relief under Section 80HH of the Act, the gross total income of the assessee has to be worked out after deducting unabsorbed losses and unabsorbed depreciation and the income eligible for deduction under Section 80HH will be the net income as computed in accordance with the provisions of the Act and not the gross income.
1