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2002 (11) TMI 87 - HC - Income TaxAssessing Officer held that the assessee was not entitled to carry forward and set off the deduction under section 80HHC of the Act relating to the earlier years on the ground that the deduction cannot be carried for ward and his view was also confirmed by the Commissioner of Income-tax (Appeals) holding that section 80VVA of the Act was omitted from the statute book and therefore the assessee was not entitled to the relief claimed. - Whether, on the facts and circumstances of the case, the Appellate Tribunal was right in law in directing the Assessing Officer to give set off of deduction under section 80HHC in the assessment year 1989-90 carried forward from the assessment years 1987-88 and 1988-89 by virtue of the restrictions imposed by section 80VVA of the Income-tax Act? - We, hold that the Appellate Tribunal has come to the correct conclusion in holding that the assessee was entitled to claim the relief even though section 80VVA of the Act was omitted from the statute book by the Finance Act, 1987, with effect from April 1, 1988, and there are no grounds to interfere. Accordingly, the question of law referred to us is answered in the affirmative, against the Revenue
Issues:
1. Interpretation of section 80VVA of the Income-tax Act, 1961 regarding deduction under section 80HHC for assessment years 1987-88 and 1988-89. 2. Entitlement of the assessee to carry forward and set off the deduction under section 80HHC for the assessment year 1989-90. 3. Impact of the deletion of section 80VVA and introduction of section 115J of the Act on the assessee's claim for deduction. Analysis: Issue 1: The court addressed the interpretation of section 80VVA of the Income-tax Act, 1961, concerning the deduction under section 80HHC for the assessment years 1987-88 and 1988-89. The Income-tax Officer had restricted the deduction available under section 80HHC by applying the provisions of sub-section (1) of section 80VVA. The court noted that the assessee was entitled to claim the deduction under section 80HHC, and the Income-tax Appellate Tribunal held that the assessee had a vested right to carry forward and set off the relief to subsequent assessment years under section 80VVA(4) of the Act. Issue 2: Regarding the entitlement of the assessee to carry forward and set off the deduction under section 80HHC for the assessment year 1989-90, the Assessing Officer initially held that the assessee was not entitled to do so, a view confirmed by the Commissioner of Income-tax (Appeals). However, the Appellate Tribunal disagreed, emphasizing the accrued vested right of the assessee under section 80VVA(4) to carry forward the relief despite the omission of section 80VVA from the statute book. Issue 3: The impact of the deletion of section 80VVA and the introduction of section 115J of the Act on the assessee's claim for deduction was crucial. The court highlighted that even though section 80VVA was deleted, the unallowed remaining deduction was permitted to be carried forward to the next succeeding assessment year, as per section 80VVA(4). The court emphasized that the deletion of section 80VVA did not affect the assessee's statutory right to claim the deduction in accordance with the law, as the unallowed deduction was deemed to be allowable in the next following assessment year. In conclusion, the court upheld the Appellate Tribunal's decision, affirming the assessee's right to claim the relief under section 80HHC despite the omission of section 80VVA from the statute book. The court relied on legal principles established by the Supreme Court in similar cases to support the assessee's accrued vested right to carry forward the deduction. The judgment favored the assessee, ruling in their favor against the Revenue, with no order as to costs.
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