2011 (1) TMI 1556 - HC - Income Tax

Summary

Issues involved:
The issues involved in the judgment are:
1. Interpretation of deduction under Section 80HHC of the Act in relation to Section 80IB of the Act.
2. Application of Section 80IB(13) and Section 80IA(9) to Section 80HHC of the Act.
3. Entitlement to deduction of Doctor's Sponsorship Expenses under Explanation to Section 37(1) of the Act.

Interpretation of deduction under Section 80HHC:
The Tribunal erred in considering the appellant's entitlement to deduction under Section 80HHC of the Act on the total income after excluding the deduction available under Section 80IB of the Act. The Tribunal should have recognized that the appellant was entitled to deduction under Section 80HHC on the gross total income without reducing it by the deduction allowed under Section 80IB of the Act. The provisions of Section 80IB(13) read with Section 80IA(9) were found to have no application to Section 80HHC of the Act. The appellant is entitled to full deduction under Sections 80HHC and 80IB of the Act, subject to its gross total income.

Entitlement to deduction of Doctor's Sponsorship Expenses:
The Tribunal erred in denying the appellant the deduction of Doctor's Sponsorship Expenses based on the Explanation to Section 37(1) of the Act. However, the appellant decided not to press this issue due to the minimal tax effect involved.

Conclusion:
The High Court disposed of the appeal with a direction to the Tribunal to re-compute the deduction in accordance with the decision of the Court. No order was given as to costs.