ORDER
Chitra Venkataraman, J.
1. This appeal is by the revenue against the order of the Tribunal, raising the question as to whether the Tribunal was right in holding that the short-term capital loss should not be deducted from the profits for the purpose of computation of deduction under Section 80HHC. The appeal relates to the assessment year 1990-91.
2. It is seen that while computing the business income for the purpose of Section 80HHC, the Income Tax Officer deducted the short-term capital loss from the income from business. On appeal, the Commissioner (Appeals) agreed with the assessee and held that the income from business for the puipose of Section 80HHC should be the one computed as per Section 28 and hence, the deduction needs to be recomputed by taking the business income without making any deduction for capital loss.
3. The revenue went on appeal before the Tribunal. The Tribunal followed the decision in the very same assessee’s case in I. T. A. Nos. 61 and 70 (Mds)/1994 and dismissed the revenue ‘s appeal. Aggrieved of the same, the present appeal is filed before this Court.
4. Learned senior standing counsel appearing for the revenue submitted that the Tribunal committed an error in its view that the income from business for the purpose of Section 80HHC should be computed as per Section 28 of the Income Tax Act and that the capital loss should be excluded from the business income for computing the deduction under Section 80HHC. She also pointed out that the earlier order referred to in the Tribunal’s order pertains to a different issue. It is the subject-matter of Tax Cases Nos. 404 and 405 of 2004.
5. It may be noted that in the decision reported in IPCA Laboratory Ltd. v. Deputy CIT , the apex court held that the deduction under Section 80HHC has to be worked out, keeping in mind the provisions of Section 80AB. Section 80AB deals with the deduction to be made with reference to the income included in the gross total income. Section 80B(5) defines “gross total income” to mean the total income computed in accordance with the provisions of this Act, before making any deductions under Chapter VI-A.
6. In the light of the decision of the apex court, computing the income in accordance with the provisions of the Act before going in for the deduction under Chapter VI-A, on the interpretation given to the scheme of Section 80HHC with reference to Section 80AB, read with Section 80B(5) that it has overriding effect over all other sections in Chapter VI-A and the computation of total income in accordance with the provisions of the Act, we reject the contentions of the revenue and thereby dismiss this appeal.
7. In the circumstances the questions raised are answered against the revenue confirming the order of the Tribunal.
8. No costs.