2011 (6) TMI 199 - HC - Income Tax

Relief u/s 80HHA - As per the decision of the Madhya Pradesh High Court as well as of this High Court in the case of CIT Vs. Amod Stamping 2004 -TMI - 10260 - GUJARAT High Court , the question is therefore, answered in the affirmative, that is, in favour of the assessee and against the revenue - The Appellate Tribunal was right in law and on facts in directing the Assessing Officer to allow relief under section 80I of the Act without reducing the amount by deducting the relief under section 80HHA of the Act - Decided in favour of assessee.

Summary

Issues:
Challenge to order under section 260A of the Income Tax Act, 1961 for Assessment Year 1990-91. Interpretation of whether relief under section 80I should be allowed without reducing the amount by deducting relief under section 80HHA.

Analysis:
1. The appellant-revenue challenged the order made by the Income Tax Appellate Tribunal for Assessment Year 1990-91 under section 260A of the Income Tax Act, 1961. The substantial question of law formulated by the Court was whether the Appellate Tribunal was correct in directing the Assessing Officer to allow relief under section 80I without reducing the amount by deducting the relief under section 80HHA.

2. The respondent's counsel referred to the Supreme Court decision in Joint Commissioner of Income Tax Vs. Mandideep Engineering And Packaging. Ind. P. Ltd. The Supreme Court had noted that both sections 80HH and 80I are independent, allowing deductions on the gross total income. The Madhya Pradesh High Court's decision in J.P. Tobacco Products P. Ltd. was also cited, where it was held that deductions could be claimed under both sections on the gross total income. The Gujarat High Court in CIT Vs. Amod Stamping had also decided in favor of the assessee, stating that profits for availing deduction under section 80-I need not be reduced by the deduction under section 80HH.

3. The appellant's counsel did not dispute the legal position presented by the respondent. The Tribunal, in its order, had already allowed deduction under section 80I and held that the assessee was entitled to deduction under section 80HH on the gross total income without reducing the amount allowed under section 80I. This aligns with the decisions of the Madhya Pradesh High Court and the Gujarat High Court. The Tribunal's view was upheld, stating that relief under section 80I should be allowed without reducing the amount by deducting relief under section 80HHA. Consequently, the appeal by the revenue was dismissed with no order as to costs.