2003 (9) TMI 4 - SC - Income Tax

Constitutional validity of section 80HHB(5) - in view of decision of SC in Continental Construction Ltd. v. CIT held that where the relief was clearly referable only to section 80-O the assessee would continue to receive deduction available thereunder. But in the case of the appellants as the consideration received was relatable only to section 80HHB the only deduction available was under section 80HHB - hence the challenge to the constitutionality of section 80HHB(S) must fail.

Summary

Issues:
Constitutional validity of section 80HHB(5) of the Income-tax Act, 1961.

Analysis:
The appellants challenged the constitutional validity of section 80HHB(5) of the Income-tax Act, 1961, arguing that it not only denies double deduction but also other deductions available to an assessee under different provisions, including section 80-O. The appellants relied on a previous court decision in Continental Construction Ltd. v. CIT to support their claim. However, upon reviewing the judgment, the court found that the previous decision did not preclude the availability of deductions under other provisions for income not wholly related to section 80HHB. The court clarified that where consideration is solely linked to section 80HHB, deductions are limited to that section. As the appellants' case fell under this scenario, the challenge to the constitutionality of section 80HHB(5) was deemed unfounded.

The court noted that the appellants' counsel did not strongly argue the constitutionality issue before the High Court, and no mention was made during earlier proceedings that the interpretation of sections 80-O and 80HHB could render section 80HHB(5) unconstitutional. Consequently, the court found no grounds to overturn the High Court's decision. Therefore, the appeal was dismissed, and no costs were awarded.

This judgment highlights the court's interpretation of the provisions of section 80HHB and section 80-O, emphasizing the specific scenarios in which deductions are applicable based on the nature of consideration received by the assessee. The court's analysis underscores the importance of considering the specific provisions and circumstances of each case to determine the availability of deductions under the Income-tax Act.