M/s. Vijay Industries Vs CIT (Supreme Court of India)
CONCLUSION –
Reading of Section 80HH along with Section 80A would clearly signify that such a deduction has to be of gross profits and gains, i.e., before computing the income as specified in Sections 30 to 43D of the Act.
FACTS –
Section 80HH grants deduction from profit and gains to an undertaking engaged in manufacturing or business of hotel and provides deduction @20% of the profits and gains of undertaking for 10 assessment years.
Assessee claimed deduction @20% of profit and gains i.e. gross profit, whereas, department contended that the deduction @20% is to be computed after taking into account depreciation, unabsorbed depreciation and investment allowance which are deduction admissible u/s 32 and 32AB of the Act.
Assessee submitted that section 80HH uses the word ‘Profit and gains’ which is different from ‘income’. Therefore, whatever profit and gains are earned by an undertaking, 20% thereof is admissible as deduction.
HELD –
Insofar as computation of income under the head ‘profits and gains’ from business or profession is concerned, Section 28 of the Act mentions various kinds of incomes which are chargeable under this head. Therefore, all those incomes specifically mentioned in that provision when earned by a particular assessee, are to be aggregated to arrive at profits and gains of the assessee.
Section 29 thereof mentions the method of arriving at ‘income’ which is to be computed in accordance with the provisions contained in Sections 30-43D of the Act. Sections 30-43D contain deductions
