2012 (11) TMI 349 - AT - Income Tax

Deduction u/s. 80IB - whether to be calculated after reducing the deduction u/s. 80HHC or on stand alone basis - Held that - Assessee relied on decision of Associated Capsules P. Ltd. Versus DCIT 2011 (1) TMI 787 - BOMBAY HIGH COURT & CIT Versus Millipore India P. Ltd. 2011 (2) TMI 1210 - KARNATAKA HIGH COURT wherein held that the tribunal was not right in holding that as per Section 80-IA(1) has to be reduced from the profits of the business of the undertaking while computing deduction under any other section under Chapter VI A of the Income Tax Act, 1961. CBDT Circular No. 772 dated December 23, 1998 stated that section 80-IA(9) has been introduced with a view to prevent the taxpayers from claiming repeated deductions in respect of the same amount of eligible income and that too in excess of the eligible profits. Bench has not considered two High Court decisions referred by the assessee which are in his favour & has relied on decision of Special bench of the Tribunal, thus when the judgments of High Court are available on this issue decision of Special bench of the Tribunal is no more relevant - This action of Hon ble ITAT is against the principle of judicial hierarchy would constitute mistake apparent on record that requires to be modified - in favour of assessee.

Summary

Issues involved:
Calculation of deduction u/s. 80IB after reducing deduction u/s. 80HHC or on a stand-alone basis.

Detailed Analysis:

1. The main issue in this case revolved around the calculation of deduction u/s. 80IB after reducing the deduction u/s. 80HHC or on a stand-alone basis. The Assessee filed an appeal against the order of CIT(A)-Valsad, dated 30.09.2009, raising this specific issue before the Bench in ground nos. 1 to 4 of the original appeal. The Bench provided detailed findings on this matter, ultimately dismissing the Assessee's appeal based on the interpretation of relevant legal provisions.

2. The Assessee then filed a Miscellaneous Application (M.A.) seeking to set aside the order dated 23/03/2012 passed by the Hon'ble tribunal. The Assessee argued that errors were apparent on the record and cited various judgments to support their case, including decisions from the Hon'ble Bombay High Court and Hon'ble Karnataka High Court. The Assessee contended that the judgments of the High Courts rendered after considering the Special Bench decision made the Special Bench decision no longer relevant.

3. The Bench, in its initial decision, did not consider the case laws referred to by the Assessee, including the judgments of the Hon'ble Bombay High Court and Hon'ble Karnataka High Court, which were in favor of the Assessee. Instead, the Bench relied on the Special Bench decision in the case of Rogini Garments and a Co-ordinate Bench decision in the case of Cello Pens & Stationary Pvt. Ltd. The Bench acknowledged the mistake of not considering the case law cited by the Appellant during the hearing and, therefore, decided to recall its order on ground nos. 1 to 4 of the original appeal and release the file for fresh hearing.

4. Ultimately, the M.A. of the Assessee was allowed, indicating that the Bench recognized the need to reevaluate the issue of calculating deduction u/s. 80IB in light of the additional legal precedents presented by the Assessee. This decision highlights the importance of considering all relevant case laws and legal arguments before making a final judgment in tax matters.