2008 (6) TMI 346 - HC - Income Tax

Industrial Undertaking - Whether the Appellate Tribunal is right in law and on facts in directing to allow deduction under sections 80HHA and 80-I simultaneously? Held that- in absence of any provision which restricts relief u/s 80-I of the Income Tax Act, 1961, to the extent the relief is granted under section 80HHA the Tribunal had not committed any error in granting deductions, both u/s 80HHA and 80I of the Act simultaneously without reducing the relief available u/s 80I of the Act by the amount of deduction granted u/s 80HHA.

Summary

Issues:
- Interpretation of sections 80HHA and 80-I of the Income-tax Act, 1961 regarding simultaneous deduction.

Analysis:
1. The High Court addressed the issue of whether deductions under sections 80HHA and 80-I of the Income-tax Act can be allowed simultaneously. The appellant, a private limited company, claimed deductions under both sections for the assessment year 1990-91. The Assessing Officer initially allowed deduction under section 80HHA first and then reduced the relief under section 80-I by the amount granted under section 80HHA.

2. The Commissioner (Appeals) supported the appellant's view that both provisions operate independently, allowing deductions under both sections without reducing the relief under section 80-I. The Tribunal also upheld this decision, confirming that deductions under sections 80HHA and 80-I can be granted simultaneously without any reduction.

3. The High Court referred to previous judgments, including CIT v. Amod Stamping and CIT v. Sidhpur Isabgul Processing Co. Ltd., to establish that in the absence of any provision restricting the relief under section 80-I based on the deduction under section 80HHA, the Tribunal's decision was valid. The court found no error in granting deductions under both sections simultaneously without reducing the relief available under section 80-I by the amount of deduction granted under section 80HHA.

4. Consequently, the High Court answered the question in favor of the assessee and against the Revenue. The appeal was dismissed, and no costs were awarded. The judgment clarified that deductions under sections 80HHA and 80-I can be allowed simultaneously without reducing the relief available under section 80-I based on the deduction under section 80HHA.