Judgment :- RAMANUJAM, J. As the scope and ambit of s. 80-K of the IT Act, 1961 (hereinafter referred to as the Act) arises in all the above petitions filed by the same assessee, it is convenient to dispose them of together by a common judgment. As the facts are practically the same in all the petitions, it is sufficient to narrate the facts in W.P. No. 1636 of 1971. 2. The South India Shipping Corporation Limited, the petitioner in all the Writ petitions is a public limited company, hereinafter referred to as the Company, which commenced its business on 20th July, 1964. It placed orders for and obtained delivery of five similar dry cargo bulk carriers between November, 1965 and December 1966 all of which, since respective dates of purchases, are engaged in the international tramping trade carrying bulk dry cargoes from and to the various ports of the world. 3. In the course of the assessment proceedings the ITO had granted, inter alia, allowances like depreciation in terms of s. 32 and development rebate under s. 33 of the Act. Apart from the said allowances, the Company claimed relief under s. 80-J of the Act, inasmuch as, the conditions laid down in the said section and the IT Rules, 1962, (hereinafter referred to as the rules) has been satisfied. The quantum of relief to which the company is eligible under s. 80-J of the Act as determined by the ITO in the various assessment order is as follows :- |----------------------------------|-------------------| | asst. yr. 1968-69 (Account year, | Rs. 1, 21, 67, 277/- | | Calendar year 1967) | | |----------------------------------|-------------------| | asst. yr. 1969-70 (Account year, | Rs. 1, 15, 76, 642/- | | Calendar year 1968) | | |----------------------------------|-------------------| | Total relief under s. 80-J as | Rs. 2, 37, 43, 919/- | | determined by the ITO | | |----------------------------------|-------------------|The company also claimed relief for the asst. yr. 1967-68 in a sum of Rs. 16, 18, 804/- and for the year 1970-71 in a sum of Rs. 1, 09, 76, 342/-. Thus the aggregate of further relief's claimed by the assessee and pending decision of the ITO amounted to Rs. 12, 25, 95, 146/-. 4. The official year of the company is the calendar year. yr. 1967-68 in a sum of Rs. 16, 18, 804/- and for the year 1970-71 in a sum of Rs. 1, 09, 76, 342/-. Thus the aggregate of further relief's claimed by the assessee and pending decision of the ITO amounted to Rs. 12, 25, 95, 146/-. 4. The official year of the company is the calendar year. The company distributed dividends for the various calendar years as under :- |---------------|------------------------|------------| | Calendar year | Rate of dividend | Amount | |---------------|------------------------|------------| | 1967 | 6 per cent paid-up | 6.00 lakhs.| | | capital of Rs. 1 crore.| | |---------------|------------------------|------------| | 1968 | 7.5 per cent""| 7.50 "| |---------------|------------------------|------------| | 1969 | 7.5 per cent""| 7.50" * | |---------------|------------------------|------------| 5. For each of the aforesaid years for which dividends were distributed, the company applied to the ITO for the issue of a certificate under s. 197(3) to the effect that dividends to be distributed would be wholly exempt from tax in view of the relief provided to the shareholders under s. 80-J in consequence of the company being entitled to the relief under s. 80-J. The ITO granted the certificates in respect of the three assessment years namely 1968-69, 1969-70 and 1970-71 exempting the company from the requirements of deduction of tax in view of the fact that the shareholders would be entitled to full relief in terms of s. 80-K of the r. 20 of the Rules. 6. As in the past years, the company applied on 29th March, 1971 to the ITO for a similar certificate under s. 197(3) for the year 1970. It was pointed out by the company in the said application that the total relief under s. 80-J to which the company would be entitled, in respect of the assessment years for which assessments have been completed and in respect of the pending assessment for 1970-71 would well exceed the amount of dividend proposed to be distributed together with the amounts of dividends already distributed, that as per the provisions of s. 80-K and r. 20 the entire amount of dividends to be distributed would be exempt from tax in the hands of the shareholders and that as such the company is not required to deduct the tax thereon. The ITO, however, by his order dt. The ITO, however, by his order dt. 2nd April, 1971 refused to issue the certificate applied for on the ground that the shareholders should be entitled to the benefit under s. 80-K only if the company had actually obtained the deduction under s. 80-J and even then only to the extent of actual deduction obtained by the company, and that upto and inclusive of the asst. yr. 1969-70 the company had not obtained relief under s. 80-J(1) due to paucity of profits as also the huge backlog of development rebate to be carried forward from earlier years. It is this order which has been imagined in Writ Petition No. 1936 of 1971. 7. The other three Writ petitions had been filed against the order of cancellation of the certificates issued under s. 197(3) for the years 1968-69, 1969-70 and 1970-71. The reason for cancellation of the certificates is the same as has been given in the order dt. 2nd April, 1971. 8. If the shareholders are entitled to the relief under s. 80-K and r. 20 in each of the assessment years, then they will not be liable to pay any tax and as such the company need not deduct any tax at source on the dividends to be distributed to the shareholders in respect of the corresponding year and therefore the company is entitle to a certificate exempting it from the requirement of deduction of tax under s. 197(3). They are entitled to a deduction under s. 80-K and r. 20 in respect of such portion of the dividend as is attributable to the profits and gains of the company in respect of which the company is entitled to deduction under s. 80-J. In this case there is no dispute that the conditions laid down in s. 80-J(1) are satisfied and the gross total income of the petitioner included profits and gains derived from ships. That the company was entitled to a deduction under 80-J cannot, therefore, be in dispute, but the controversy between the parties has raised in view of the circumstance that the company had unabsorbed development rebate to be carried forward and set off against further profits, and the relief under s. 80-J. Sec. 80-J in any of the years due to paucity of profits as also the huge backlog of development rebate to be carried forward from earlier years, the Revenue contends that the relief to which the shareholders will be entitled under s. 80-K in any year is dependent upon the actual absorption of the relief under s. 80-J in the company's assessment in the very year. The petitioner, however, contends that the relief in the hands of the shareholders is not dependent upon the actual absorption of the allowance under s. 80-J in the company's assessment, and that a combined reading of s. 80-K and r. 20 clearly establishes that the shareholder is entitled to relief if the company is entitled to relief under s. 80-J of absorption. Thus the crucial question is as to whether the relief to which the share-holders will be entitle to under s. 80-K is dependent upon not only on the entitlement of the company for relief under s. 80-J but also upon the actual absorption of such relief in the company's assessment. 9. According to the Revenue, the shareholders are not entitled to the benefit under s. 80-J if the company itself is not in a position to actually obtain relief under s. 80-J in view of paucity of profits or backlog of development rebate and other allowances yet to be adjusted. 9. According to the Revenue, the shareholders are not entitled to the benefit under s. 80-J if the company itself is not in a position to actually obtain relief under s. 80-J in view of paucity of profits or backlog of development rebate and other allowances yet to be adjusted. It is pointed out by the Revenue that the provisions of s. 80-K are no applicable to the dividends to be distributed by the company for the various years in question for the reason that there was nill gross total income for the company for any of the said years and, therefore, there would be no question at all of its gross total income including within it the profits and gains derived from ships so as to attract s. 80-J , and that when the main exemption under s. 80-J is itself inapplicable to any part of the profits of the company for any of the years, there is no question of any part of the dividends of the company being attributed to any exempted part of the company's profits. The Revenue, in support of the said summation, relies on the decision of the Supreme Court in CIT vs. S. S. Sivan Pillai. 10. The learned counsel for the petitioner would, however, submit that the decision in CIT vs. S. S. Sivan Pillai was rendered with reference to ss. 15-C(1) and 15-C(4) of the IT Act, 1922 corresponding to ss. 84 and 85 respectively of the IT Act of 1961 before their deletion in 1969 and that the said decision cannot be of any assistance in the interpretation of ss. 80-J and 80-K which are entirely different from ss. 15-C(1) and 15-C(4). If the principle laid down in the said decision were to apply to the facts of this case, then the petitioner company is bound to make deduction of tax at source before paying the dividends to the shareholders, as the shareholders will not be entitled to the relief under s. 80-K. As the Revenue entirely relies on the said decision as defence to the claim made by the petitioner, the scope of the said decision and its applicability to the facts of this case has to be considered. 11. At this stage, it is necessary to refer to the relevant statutory provisions. Secs. 11. At this stage, it is necessary to refer to the relevant statutory provisions. Secs. 15-C(1) and 15-C(4) of the IT Act of 1922 were as follows : Sec. 15-C. Exemption from tax of newly established industrial undertakings :- (1) Save as otherwise hereinafter provided the tax shall not be payable by an assessee on so much of the profits or gains derived from any industrial undertaking (or hotel) to which this section applies as do not exceed six per cent, per annum on the capital employed in the undertaking (or hotel), computed in accordance with such rules as may be made in this behalf by the Central Board of Revenue. .................................................................... (4) The tax shall not be payable by a shareholder in respect of so much of any dividend paid or deemed to be paid to him by an industrial undertaking (or a hotel) as is attributable to that part of the profits or gains on which the tax is not payable under this section. (Explanation :- The amount of dividend in respect of which the tax is not payable under this sub-section shall be computed in accordance with such rules as may be made in this behalf by the Central Board of Revenue). Under the IT Act of 1961 ss. 15-C(1) and 15-C(4) were replaced by ss. 84 and 85 by the Finance (No. 2) Act of 1967. Secs. 84 and 85 were later replaced by ss. 80-J and 80-K respectively. As will be clear from a comparative reading of ss. 80-J and 80-K with the corresponding earlier provisions in ss. 15-C(1) and 15-C(4) of the Act 1922 that they were substantially different. Under the earlier provisions no Income-tax was payable by the newly established industrial undertaking on so much of the profits as do not exceed six per cent per annum on the capital employed in the undertaking and no tax was payable in respect of dividends attributable to that part of the profits on which the tax is not payable by the company. Under the present provisions in ss. 80-J and 80-K the position is different. The profits of the industrial undertakings are entitled to exemption from Income-tax to the extent of six per cent per annum on the capital employment. Thus a straight deduction of six per cent of the capital employed is given from the total income of the company. Under the present provisions in ss. 80-J and 80-K the position is different. The profits of the industrial undertakings are entitled to exemption from Income-tax to the extent of six per cent per annum on the capital employment. Thus a straight deduction of six per cent of the capital employed is given from the total income of the company. In addition, if the profits are less than 6 per cent in any year the deficiency is allowed to be carried forward and set off against future year's profits. This change was brought about a result of Bhoothalingam's report which suggested that instead of rebate being given on profits on newly established industrial undertakings at six percent of the average capital employed by the business, a strength deduction of six per cent of such capital may be allowed every year, and that where the profits actually earned are less than six per cent, the difference may be allowed to be carried forward and adjusted against such profits for 8 years as in the case of business loss. 12. Construing the earlier provision in s. 15-C(4) this Court in S. S. Sivan Pillai vs. CIT, 1966 (61) ITR 197 expressed the view that the profits and gains of a newly established industrial undertaking for the purpose of sub-ss. (1) or (4) of s. 15-C have to be computed by finding the depreciation allowance under ss. 10(2)(vi) and (vi-a) in the current year without taking into account either the unabsorbed depreciation or losses of earlier years carried forward under s. 24, that the set off of losses of earlier years under s. 24(2) and the allowances in respect of unabsorbed depreciation of earlier years both under ss. 10(2)(vi) and 10(2)(vi-a) do not enter into the computation under s. 15-C(3) and that, therefore, if the industrial undertaking has made properties as computed under s. 15-C(3) and its shareholders have been paid dividends, it cannot be denied the benefit of the exemption under s. 15-C(4) on the ground that the profits of the undertaking for the purpose of adjustment of taxes would be reduced to nill in view of the unabsorbed depreciation of earlier years. 13. 13. In CIT vs. S. S. Sivan Pillai the Supreme Court disagreed with that view and held that the shareholders were not entitled to the exemption under s. 15-C(4) in relation to the dividends received from the company, as the company had no taxable profits in the relevant years in view of the unabsorbed depreciation of earlier years admissible under ss. 10(2)(vi) and (vi-a) and carried forward under s. 24 and that the view taken by this Court that unabsorbed depreciation of the earlier years cannot be taken into account for computation of profits for the purpose of s. 15-C(3) is contrary to the scheme of s. 15-C which contemplates the determination of the profits and gains of an industrial undertaking in the manner provided by s. 10 without there being a distinction between the unabsorbed depreciation for the previous year and the depreciation for the current year. According to their Lordships of the Supreme Court the right to appropriate profits towards unabsorbed depreciation of the previous year arises by virtue of s. 10(2)(vi) proviso (b) and not under s. 24(1) and, therefore, in the computation of profits of an industrial undertaking for any year under s. 15-C(3) unabsorbed depreciation of the earlier years cannot be ignored. Exemption under s. 15-C(1) from payment of Income-tax on the part of the profits of a new industrial undertaking related to taxable profits and not to business profits. The taxable profits or gains of an industrial undertaking have to be determined under s. 10 of the Act. Even if an undertaking has earned profits out of its commercial activity if it has no taxable profits it can not claim exemption from payment of tax under s. 15-C(1). If the undertaking cannot claim benefit under sub-s. (1) of s. 15 the shareholders also cannot get the benefit under sub-s. (4), for there is no dividend paid which is attributable to that part of the profit or gains on which the tax was not payable by the undertaking under sub-s. (1). 14. The question then is whether the said principles laid down by the Supreme Court will also apply to the interpretation of ss. 80-J and 80-K and whether the change in the statutory provisions is of any consequence ? 15. 14. The question then is whether the said principles laid down by the Supreme Court will also apply to the interpretation of ss. 80-J and 80-K and whether the change in the statutory provisions is of any consequence ? 15. According to the learned counsel for the assessee the intention of the legislature is to give relief both to the company as well as to the shareholders and both reliefs are independent of each other and as such the relief due to the shareholders under s. 80-K in any year cannot be denied merely because the relief under s. 80-J was not actually allowed to the company in that year in view of the backlog of unabsorbed depreciation and development rebate of the earlier years. The learned counsel points out that while under s. 15-C the relief to which the company will be entitled cannot be carried over, under s. 80-J(3) the unabsorbed relief can be carried forward and set off against the profits of the succeeding years, that in view of this new provision under which the industrial undertaking entitled to the benefit of s. 80-J(1) is permitted to carry forward and set off against future year's profits if the current year's taxable profit are less than six percent of the capital employed even in the year when the taxable profits are less than six percent of the capital employed, the company should be taken to have obtained the relief under s. 80-J in the assessment year so as to entitle the shareholders to claim the benefit of s. 80-K , and that the relief under s. 80-J having been quantified and allowed to be carried forward in the company's assessment it should be taken that there has been a deduction under that section as the permission to carry forward for the purpose of setting off against the subsequent years' profits in one form of deduction. He refers to r. 20 of the Rules which provides for the method of computation of portion of dividend attributable to profits and gains from new industrial undertaking for the purpose of determining the quantum of deduction to be given to the shareholder under s. 80-K. as per that rule, the aggregate amount of that part of the profits and gains of the company on which no tax was payable by it under s. 80-J in respect of which deductions is allowable shall first be determined. The words used in the said rule are "deduction allowable under s. 80-J" and not "deduction actually allowed under s. 80-J". it is stated that in the company's assessment the relief to which the company will be entitled under s. 80-J having been determined and allowed to be carried forward, it is clear that the relief under s. 80-J has been treated as allowable in the hands of the company. Thus, it is the contention of the learned counsel that r. 20 under which the relief given to the shareholder under s. 80-K has to be determined does not contemplate the factual absorption of the allowable deduction under s. 80-J by the company. 16. The learned counsel for the Revenue on the other hand contends that the relief to which the shareholder will be entitled under s. 80-K in any year is not independent but dependent on the company actually getting the relief under s. 80-J in that year, that if the company was not in a position to get the relief under s. 80-J in any year, the shareholder also cannot get any relief under s. 80-K in that year, that the condition precedent for the company claiming the benefit under s. 80-J being the existence of a gross total income from which deduction is contemplated if there is no total income, there is no tax liability on the company and as such there is no entitlement for deduction of six per cent of the capital employed. According to the learned counsel, unless the total income of the company is a positive figure, there is no question of deduction of six per cent of the capital employed as contemplated by s. 80-J and the decision of the Supreme Court in CIT vs. S. S. Sivan Pillai holds good even in respect of the relevant statutory provisions as they exist now. He points out to paragraph 28 of the memorandum attached to the Finance (No. 2) Act of 1967 in support of his submission that unless there are taxable profits derived from the undertaking, there is no question of applying s. 80-J. paragraph 28 (iii) of the said memorandum says : "As industrial enterprises are generally not in a position to have adequate profits in the initial years. They are, often, not able to avail, in full, of the benefit of the 'tax holiday'. In order to make the 'tax holiday' concession more meaningful in such cases, it is proposed to allow a carry-forward of the amount of the deficiency in the profits in relation to the amount of 6 per cent of the capital employed, during each year of the five year (in the case of a co-operative society, 7 year) period of the 'tax holiday', to the succeeding year in that period. The amount of the 'deficiency', so carried forward from year will be added to the amount of 6 per cent of the capital employed in the succeeding year and the assessee will be entitled to exemption from tax in that year on his or its profits to the extent of the aggregate of such 'deficiency' and the amount of six per cent of the capital employed. Where such 'deficiency' is not fully absorbed by the fifth year (seventh year in the case of a co-operative society) the unabsorbed 'deficiency' will be carried forward to be succeeding year and in that year, the assessee will be exempt from tax on his profits to the extent of such unabsorbed 'deficiency' and so on, for succeeding year, upto the eighth year as reckoned from the year in which the undertaking commenced its operations or the ship was first brought into use."Paragraph 44 of the same memorandum so far as it is relevant says :- " 44. New provisions for deduction, in the computation of the total income, of the full amount of income at present qualifying for rebate of tax : In the following cases, it is sought to provide for a deduction, in the computation of the total income, or the full amount of income, qualifying under the existing law for a rebate of tax : (i) ................................... (ii) ................................... (iii) ................................... (ii) ................................... (iii) ................................... (iv) 'Tax holiday' profits (covering also the element of 'deficiency' or 'unabsorbed deficiency' referred to in paragraph 28 herein above from newly set up industrial undertaking owned by any assessee and hotels and ships owned by Indian companies. (v) In the case of any shareholder of a company, dividends attributable to the 'tax holiday' profits of the company" * We are not able to see how the memorandum helps the contention of the Revenue that s. 80-K can be invoked by a shareholder only in respect of the dividends declared by a company which had taxable profits and not in respect of the dividends paid by the company out of its business profits. Paragraph 44(iv) seems to suggest that a deduction in the computation of total income is contemplated of the 'tax holiday' profits (covering also the element of deficiency or unabsorbed deficiency referred to in paragraph (28) and that the benefit of 'tax holiday' can be claimed by the company even when there was no taxable profits by way of carry forward of the deficiency or the unabsorbed deficiency. Unlike the situation which obtained earlier when the benefit of 'tax holiday' can be claimed only from the profits of the relevant assessment year, under the existing provisions of s. 80-J the benefit of 'tax holiday' is given by allowing a carry forward of the amount of deficiency. The question is whether a company, which is not able to absorb the exemption conferred by s. 80-J in the assessment year either due to lack of profit or due to existence of unabsorbed depreciation allowance or development rebate and carried forward the unabsorbed exemption to the subsequent year, can be said to have not availed of the benefits of s. 80-J 17. In Orissa Cement Ltd. vs. CIT the Delhi High Court held that the scheme of s. 80-J of the 1961 Act is different from that of s. 15-C of the 1922 Act and that the said difference lies in the fact that under s. 15-C the benefits of unabsorbed exemption of an earlier year cannot be availed of in a subsequent year and, it was not possible to allow the said benefit to be carried forward and set off against the taxable profits of the subsequent years, unlike the provisions in s. 80-J , which applied the principle of carry forward and set off to the 'tax holiday' profits of the newly established industrial undertaking and confers the benefit of unabsorbed exemption of an earlier year being availed of in a subsequent year. 18. Sampath Iyengar in his Treatise on Income-tax 6th Edition, Volume II at page 1317 points out that though decision of this Court in S. S. Sivan Pillai vs. CIT, 1966 (61) ITR 197 was reversed by the Supreme Court in CIT vs. S. S. Sivan Pillai in the context of the provision in ss. 15-C(3) and (4) the line of reasoning in the former decision that even where the set off of unabsorbed depreciation and of losses of earlier years may ultimately wipe out the taxable profits of the industrial undertaking, the shareholders can claim exemption in respect of the dividends distributed by the company out of its profits gets support from the following expression in s. 80-K 'or in respect of which the company is entitled to deduction under s. 80-J. "Sec. 80-K appears to cover two types of situations, (1) where the company has made more than the statutory percentage of profits and has distributed dividends partly out of the taxed profits and partly out of untaxed profits, the shareholder should be entitled to pro rata exemption. (2) Where the company has not suffered any tax at all the exemption can be claimed by a shareholder from his total income in respect of dividends equal to so much part as is attributable to the profits derived by the industrial undertaking (i) on which no tax is payable by the industrial undertaking prior to 1st April, 1968 or (ii) in respect of which the company is entitled to deduction under s. 80-J subsequent to the said date. A close reading of s. 80-K shows that in respect of the asst. yr. 1968-69 onwards the shareholder will be entitled to the benefit of s. 80-K if the company was entitled to deduction under s. 80-J whether it actually got the deduction or not. From a comparison of s. 15-C(4) of the 1922 Act and the present s. 80-J of the 1961 Act it is clear that the same phraseology is used in both the sections in respect of the Company's profits assessable for the assessment years prior to 1968-69. But s. 80-J specifically provides for the shareholders right to deduction by a reference to the company's profits assessable for 1968-69 onwards "in respect of which the company is entitled to deduction under s. 80-J". These words seem to cover cases where the deduction is not actually allowed to the company on account of inadequacy of profits but it is allowed to carry forward the deficiency under s. 80-J(30). Unlike s. 15-C(4) of the 1922 Act, in order to entitle the shareholder to the benefit of s. 80-K in or after the asst. yr. 1968-69, it is not necessary that the company should have actually obtained deduction under s. 80-J and it is enough if the company is entitled to such deduction. 19. Mr. Balasubramanyam, for the Revenue submits that unless there is total income from which the deduction of the 6 per cent of the capital employed is contemplated, the benefit of s. 80-J(1) cannot be claimed, that even the deficiency contemplated in s. 80-J(3) has to be set off only against the total income, that if there is no total income, there is no tax liability and as such the company cannot claim any deduction under s. 80-J when there is no tax liability, and that, therefore, if there are no profits, there is no entitlement to the deduction under s. 80-J. Balasubramanyam is right when he says that there should be a total income for the application of s. 80-J , for the deduction under that section of 6 per cent of the capital employed is from the total income of the company. But the point is whether the company can be said to have no total income merely because it has no taxable profits. But the point is whether the company can be said to have no total income merely because it has no taxable profits. Sec. 80-J uses the words "gross total income of an assessee" and "gross total income" has been defined under s. 80-B(5) as the total income computed in accordance with the provisions of the Act. Before making any deduction under Chapter 6-A. "Total income" has been defined under s. 2(45) as the total amount of income referred to in s. 5 , computed in the manner laid down in the Act. It is in the light of these definitions s. 80-J has to be construed. If so construed s. 80-J provides for a deduction of an amount not exceeding 6 per cent of the capital employed if the total income as computed under the provisions of the IT Act includes any profit and gains derived from the industrial undertaking. From the fact that the total income as computed is a negative figure, it cannot be said that it did not include the profits and gains derived from the industrial undertaking. 20. In Ambika Silk Mills Co. Ltd. vs. CIT while construing the scope of the rebate under s. 17(7) , this Court held that under that section the relief to which a company is entitled in respect of super-tax is on the amount of 'capital gains" * , that consequently when the total income in any year of a company consists entirely of a residue of capital gains remaining after set-off against the total capital gains of that year of loss from business, the amount by which the super-tax payable by them should be reduced should be computed on the total amount of the capital gains and not on the residue of capital gains remaining after set off. In CIT vs. C. S. Sastri an assessee, a Chartered Accountant, got for the calendar year 1950 a sum of Rs. 31, 006/- from the practice of his profession, as also Rs. 741/- from other sources. He had incurred a loss of Rs. 15, 598/- in respect of his properties. The result was that his total income for the year was only Rs. 16, 149/-. He claimed one-fifth of Rs. 31, 006/- as earned income relief in accordance with s. 2(2) of the Finance Act of 1950. But the Revenue allowed the relief only to the extent of one-fifth of Rs. 15, 598/- in respect of his properties. The result was that his total income for the year was only Rs. 16, 149/-. He claimed one-fifth of Rs. 31, 006/- as earned income relief in accordance with s. 2(2) of the Finance Act of 1950. But the Revenue allowed the relief only to the extent of one-fifth of Rs. 16, 149/- The Court held that the earned income relief to which the assessee will be entitled will be one-fifth of Rs. 31, 006/- as the said earned income enters into the computation of the total income. 21. On the principle laid down in the above decisions, if in the total income of the undertaking as computed whether it be profit or loss, the profits and gains of the new industrial undertaking had been included, then the undertaking is entitled to the benefit of s. 80-J. It is because of this entitlement of the company to the relief under s. 80-J , the deficiency has been allowed to be carried forward and set off against income of the subsequent years in the assessee's case. The ITO having determined the amount of relief to which the undertaking will be entitled to under s. 80-J and allowed the same to be carried forward and set off against the subsequent year's profits, it is not possible to hold that the undertaking was not entitled to the relief under s. 80-J. 22. The learned counsel for the assessee says that the computation and carry forward of the deficiency of the relief under s. 80-J is one form of deduction, that this position is also made clear by r. 20 which uses the word "allowable" instead of the words "actually allowed", and that r. 20 does not contemplate the factual absorption of deficiency in the particular year. Reference is made to the decision in Allied Publisher (P) Ltd. vs. CIT in support of his submission that the benefit of carrying forward of the deficiency given under s. 80-J(3) to the assessee in the assessment year in question should be taken to be the actual allowance of the relief under s. 80-J. in construing the scope of the words "depreciation actually allowed" in s. 10(5)(b) the Court said that the word mean the depreciation of which the assessee had received effective advantage or benefit and not merely depreciation which is notionally allowed or which is allowable. The Court compared the explanation to s. 10(5)(b) with the explanation to s. 10(2)(b) and held that the legislature had made a clear cut distinction between depreciation actually allowed and an allowance which shall be deemed to be a depreciation actually allowed. The explanation to s. 10(2)(b) provided that any depreciation carried forward under cl. (b) under the proviso to cl. (vi) of sub-s. (2) shall be deemed to be the depreciation actually allowed. We are not, however, inclined to take the view that wherever the relief under s. 80-J has been computed and carried forward in the company's assessment, the company should be taken to have been actually allowed the deduction. The decision referred to above proceeds on the basis of a special provision in s. 10(2)(b). Deduction is allowed only in the year when there are sufficient profits to absorb the entire carried forward benefit under s. 80-J. 23. Moreover, as already stated, the company is entitled to the benefit under s. 80-J. This entitles the shareholders who get the dividends to claim benefit under s. 80-K as the last portion of that section merely refers to entitlement of the company for relief under s. 80-J and not the actual allowance of the relief under that section. This is also the view taken by the Cormomandal Fertilisers Ltd. vs. ITO. W.P. No. 2279 of 1973 (Andh.). We, therefore hold that the company is entitled to the certificates under s. 197(3) which specifically enjoins the ITO to determine the appropriate proportion of the dividends to be deducted under the provisions of s. 80-K. 24. The Writ Petitions are, therefore, allowed and the rule nisi made absolute. The petitioner will have its cost in W.P. No. 1636 of 1971 only. Counsel's fee Rs. 250/-. There will, however, be no order as to costs in the other Writ Petitions.