ITA.No. 7 of 2004. 12.8.2008. Present: Mr.Vishal Mohan, Advocate vice Mr.Alok Ranjan, Advocate for the Appellant. Mr.Vinay Kuthiala, Advocate for the Respondent. Learned counsel for the parties agreed that the substantial question of law framed in this appeal is contrary to the view expressed by the Hon’ble Apex Court in the Motilal Pesticides (I) Pvt. Ltd. Vs. Commissioner of Income Tax 2000 Vol. 243 I.T.R. 26 and IPCA Laboratory Ltd. Vs. Deputy Commissioner of Income Tax, 2004 Vol. 266 ITR 521. In Motilal Pesticides (I) Pvt. Ltd. Vs. Commissioner of Income Tax 2000 Vol.243 I.T.R. 26 the following proposition of law has been laid down by the Hon’ble Apex Court: “In Distributors (Baroda) P.Ltd.’s case (1985) 155 ITR 120 (SC), however, this court specifically overturned its earlier decision in Cloth Traders (P) Ltd.’s case (1979) 118 ITR 243 (SC) and held that deduction is to be allowed only on the net income and not on the gross income . With reference to section 80 AB, this court said it was merely of a clarificatory nature and the decision of this court in distributors (Baroda) P. Ltd.’s case (1985) 155 ITR 120 is thus irrespective of section 80 AB of the Act. The effect of section 80AB was now that deduction would have to be made from the net income and not from the gross income.” In IPCA Laboratory Ltd. Vs. Deputy Commissioner of Income Tax, 2004 Vol. 266 I.T.R. 521, the Hon’ble Apex Court has held as under: “Section 80 AB makes it clear that the computation of income has to be in accordance with the provisions of the Act. If the income has to be computed in accordance with the provisions of the Act, then not only profits but also losses have to be taken into consideration.” In the light of the facts, the learned counsel for the parties have agreed that the appeal is liable to be dismissed. We have also perused the two judgments referred to hereinabove and we find that the question of law framed is to be replied in the negative in the light of the law laid down by the Hon’ble Apex Court in the identical matter. Accordingly the appeal is dismissed, so also the pending application. (Jagdish Bhalla), C.J. (Sanjay Karol),J. August 12, 2008(R)