JUDGMENT 1. This is a reference at the instance of the Commissioner of Income-tax and the following three questions of law have been referred by the Tribunal for answer by this court : " (i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law to hold that expenses on repairs and maintenance of cars, etc., being fully allowable under Section 31 of the Income-tax Act cannot be partly disallowed under Section 37(3A) of the Income-tax Act, 1961 ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in allowing unpaid sales tax liability of Rs. 1,49,988 added back by the Income-tax Officer under Section 43B by holding that the notification issued by the Central Board of Direct Taxes No. 496, dated September 25, 1987, has retrospective effect ? (iii) Whether the Tribunal was justified in law to hold that for working out the deduction under Sections 80HH and 80I, the earlier years' losses could not be deducted from the current year's income ?" 2. The brief facts giving rise to these questions are that during the course of assessment proceedings for the assessment year 1984-85, the assessee made substantial claim of expenses on repair and maintenance of cars, etc. The assessee had its head office as well as branch offices also. The Assessing Officer considered and held that while working out the disallowable expenses out of the total claim under Section 37(3A) and (3B), the provisions could not be considered unitwise and on the contrary, the entire expenses had to be taken into consideration. Further, the Assessing Officer also included expenses on abovestated repairs and maintenance of cars. Though the Income-tax Appellate Tribunal has upheld the Assessing Officer's finding to the effect that the claim of the assessee that its head office and branches are separate entities for the purpose of Section 37(3A) and (3B) was not acceptable, it has allowed the assessee's claim that expenditure incurred on maintenance and repairing of car, etc., is beyond the purview of Section 37(3A). The Tribunal in this regard confirmed the finding of the Commissioner of Income-tax (Appeals). The Tribunal relied on the decision of the Bombay High Court in the case of CIT v. Chase Bright Steel Ltd. (No. 1) [1989] 177 ITR 124. 3. The Tribunal in this regard confirmed the finding of the Commissioner of Income-tax (Appeals). The Tribunal relied on the decision of the Bombay High Court in the case of CIT v. Chase Bright Steel Ltd. (No. 1) [1989] 177 ITR 124. 3. So far as the first question is concerned, we are of the opinion that this question has not rightly been approached by the Tribunal. More so, this court has also taken a similar view in the case of CIT v. Bharat Industrial Works [1997] 226 ITR 543 (M. C. C. No. 249 of 1993, decided on May 7, 1996) (supra). Therefore, the first question has to be answered in favour of the Revenue and against the assessee. 4. The assessee also claimed a liability of Rs. 1,49,988 towards payment of sales tax which remained unpaid throughout the previous accounting period and in the next succeeding previous year as well. The Assessing Officer invoked the provisions of Section 43B and disallowed the claim. On appeal by the assessee, the Commissioner of Income-tax (Appeals) allowed the claim and held that as per the Central Board of Direct Taxes Circular No. 496 (see [1988] 169 ITR (St.) 53), dated September 25, 1987, an assessee who is notified to be entitled for the benefit of deferred payment scheme, is entitled to retain the sales tax collected from customers for a period of ten years and for the purposes of the Sales Tax Act and also for the purposes of Section 43B of the Act, the amount shall be deemed to have been paid. The Tribunal decided the issue in favour of the assessee and dismissed the departmental appeal. In view of the circular of the Central Board of Direct Taxes, it is clarified that wherever such amounts under the deferred payment scheme are there in the State, then the assessee will be entitled for the benefit of deduction and the provisions under Section 43B of the Act will not come in the way of the assessee. Therefore, this question is answered against the Revenue and in favour of assessee. 5. The assessee also claimed deduction of Rs. 54,632 and Rs. 43,076 under Sections 80HH and 80I, respectively. The Assessing Officer found that while making such claim the assessee did not deduct losses of earlier years from the current year's income. Therefore, this question is answered against the Revenue and in favour of assessee. 5. The assessee also claimed deduction of Rs. 54,632 and Rs. 43,076 under Sections 80HH and 80I, respectively. The Assessing Officer found that while making such claim the assessee did not deduct losses of earlier years from the current year's income. The Assessing Officer, therefore, first deducted the earlier years' losses and then allowed the claim of deduction on the basis of the remaining income. The allowable deductions were determined at Rs. 10,106 and Rs. 8,084, respectively. The Commissioner of Income-tax (Appeals) directed to allow the full amount of deduction under both the sections without deducting earlier years' losses from the current income. The Department did not accept the finding of the Commissioner of Income-tax (Appeals) and preferred an appeal before the Tribunal. The Tribunal dismissed the appeal of the Department. We have considered this aspect also and we find that the approach of the Commissioner of Income-tax (Appeals) and the Tribunal is correct. If the losses of the earlier years are deducted from the current year's total income under Sections 80HH and 80I, the amount of benefit will be reduced to a considerable extent. As a matter of fact, the benefits under Section 80HH and Section 80I are in the nature of incentives for these industries in the backward areas. Therefore, a positive approach should be taken in the matter. We are of the opinion that the Commissioner of Income-tax (Appeals) and the Tribunal have correctly held in favour of the assessee and against the Revenue. 6. As a result of the above discussion, question No. 1 is answered in favour of the Revenue and against the assessee and questions Nos. 2 and 3 are answered against the Revenue and in favour of the assessee.