2004 (11) TMI 65 - HC - Income Tax

Question of law - 1. Whether Tribunal was justified in holding that no proportionate deduction on account of depreciation expenses of vehicles ginning charges received from others and interest on deposits/borrowings should be made for working out eligible profits for the purposes of deduction under sections 80HH and 80-I? 2. Whether Tribunal was justified in holding that the deduction under section 80-I is allowable on the gross total income unreduced therefrom the deduction allowed under section 80HH? - The issue involved on this question really does not involve any question of law as such but it is based on concurrent finding of facts based on the peculiar facts of the case. The Assessing Officer bifurcated the claim of depreciation in two units. However the Commissioner of Income-tax (Appeals) and the Tribunal accepted the factual version of the assessee on the question as to how and in what way they used the vehicles in question and why they claimed depreciation only in unit No. 1 and not in unit No. 2. Hence revenue appeal is dismissed

Summary

Issues:
1. Interpretation of depreciation expenses, ginning charges, and interest on deposits for deduction under sections 80HH and 80-I.
2. Allowability of deduction under section 80-I on gross total income without reducing the deduction under section 80HH.

Analysis:
1. The judgment addressed the interpretation of depreciation expenses, ginning charges, and interest on deposits for deduction under sections 80HH and 80-I. The court considered whether the Income-tax Appellate Tribunal was justified in holding that no proportionate deduction should be made for working out eligible profits for deduction under these sections. The case involved the assessee owning vehicles used in two units, with a dispute arising over the allocation of depreciation between the units. The Assessing Officer allocated depreciation in both units, affecting the assessee's claim under sections 80HH and 80-I. The Commissioner of Income-tax (Appeals) and the Tribunal accepted the factual version of the assessee, leading to the dismissal of the appeal filed by the Revenue. The court concluded that the issue did not involve a question of law but was based on concurrent findings of fact, emphasizing that the benefit of sections 80HH and 80-I was granted based on the ownership of the vehicles by one unit. The court declined to find a substantial question of law on this issue and dismissed the appeal.

2. The judgment also examined the allowability of deduction under section 80-I on the gross total income without reducing the deduction under section 80HH. The court noted that a similar issue had been decided against the Revenue in a previous case, and the Tribunal had correctly upheld the deduction calculation in favor of the assessee. The court referenced the decision in J.P. Tobacco Products (P.) Ltd. v. CIT and held that the deduction under section 80-I should be calculated as per the previous decision. As the Tribunal had already decided on this matter, the court answered the question against the Revenue without further deliberation. Consequently, the court found no substance in the appeal and dismissed it without costs.