2015 (2) TMI 718 - HC - Income Tax

Entitlement to deduction under section 80HHB - Tribunal held that the assessee was entitled to deduction in respect of each project instead of netting up of profits from all the overseas projects and thus directing AO to allow the deduction without setting off the loss suffered in other foreign projects - Held that - The Tribunal has decided the matter essentially in the light of the facts and material placed before it. In such circumstances, and considering the provision in question and the order of the Tribunal, we do not think that the Appellate Tribunal was in error in holding that the assessee was entitled to the deduction under section 80HHB in respect of each project instead of netting up of profits from all the overseas projects. In such circumstances, the Tribunal was in no error in directing the Assessing Officer to allow the deduction as claimed by the assessee without setting off all the losses suffered in other foreign projects. See CIT v. Canara Workshops P. Ltd. 1986 (7) TMI 5 - SUPREME Court - Decided in favour of assessee.

Summary

Issues:
Deduction under section 80HHB of the Income-tax Act, 1961.

Analysis:
1. The Tribunal referred questions regarding the entitlement to deduction under section 80HHB of the Income-tax Act, 1961, for each project instead of netting up profits from all overseas projects. The Tribunal's decision was challenged, leading to a detailed analysis by the High Court.

2. The case involved an assessee engaged in construction activities with projects in India and abroad. The Assessing Officer initially did not allow the deduction under section 80HHB due to pending applications. After the applications were approved, the Assessing Officer calculated the deduction differently from the assessee's claim, leading to a dispute that reached the Tribunal.

3. The Tribunal interpreted section 80HHB(1) to allow deductions unit-wise, not requiring aggregation of profits from all overseas projects. The High Court noted that the Tribunal considered the facts specific to the assessee's case and concluded that the deduction should be granted for each project without setting off losses from other foreign projects.

4. The High Court reviewed relevant legal provisions and previous judgments, emphasizing that the Tribunal's decision was based on the specific facts presented. The Court found no wider controversy or legal question necessitating its intervention, ultimately ruling in favor of the assessee and against the Revenue.

5. The Court highlighted that the Tribunal's decision was in line with the provisions of section 80HHB and the specific circumstances of the case. The judgment referenced previous case law to support the assessee's entitlement to deductions for each project, concluding that the Tribunal's decision was appropriate and disposing of the reference in favor of the assessee.

6. The High Court's analysis focused on the interpretation of section 80HHB and the specific facts of the case, emphasizing that the Tribunal's decision was well-founded and did not warrant interference. The judgment provided clarity on the computation of deductions under section 80HHB, affirming the Tribunal's decision and resolving the dispute in favor of the assessee.