In Brief
Shital Fibers Ltd claimed deductions under both Section 80-IA and Section 80-HHC of the Income Tax Act for the assessment year 2002-03. The disputed question concerned whether allowing a deduction under Section 80-IA reduces the gross total income when computing deductions under Section 80-HHC. The Supreme Court held that subsection (9) of Section 80-IA affects the allowability, not the computation, of deductions. An assessee can compute both deductions separately without reducing gross total income; however, the aggregate deductions cannot exceed the eligible profits. The Court endorsed the Bombay High Court's interpretation as logical and correct, overruling the contrary views of the Delhi and Kerala High Courts.
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