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2021 (2) TMI 894 - AT - Income TaxDenying double deduction(s) u/s.80HHC and Sec.80I - HELD THAT -DR fails to dispute that the Revenue s Special Leave Petition 2015 (12) TMI 708 - SUPREME COURT stands dismissed - Thus Corresponding hon'ble high court s order deciding the issue in assessee s favour and against the department has attained finality that the twin claims of Section 80HHC and Section 80-IA raised at the former s behest qua profits of the eligible business undertaking do not amount to double deduction. Revenue s objections that once this tribunal s remand directions had made it clear that the issue had to be decided in view of the Special Bench s decision 2009 (6) TMI 124 - ITAT DELHI-C - On one hand is tribunal s remand order directing the Assessing Officer to follow its yet another Special Bench (supra) which itself stands overruled in ASSOCIATED CAPSULES P. LTD. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX 2011 (1) TMI 787 - BOMBAY HIGH COURT and on the other hand is the judicial verdict directly on the issue coming from the Hon'ble highest court of land. We thus quote Article-141 of the Constitution of India and hold that judicial discipline requires that all judicial forums must make way for the hon'ble apex court s decision on the relevant issue. It must therefore be presumed that the issue now stands settled upto hon'ble Supreme Court in assessee s favour with retrospective effect in other words. We thus accept the assessee s sole substantive grievance in principle and leave it open for the Assessing Officer to finalise consequential computation as per law. It is made clear that although the assessee has filed its calculation sheet(s) regarding Section 80-IA and Section 80HHC deduction(s) pertaining to the alleged eligible undertakings, this latter component is restored back to the Assessing Officer to arrive at his final conclusion as per law after factual verification of the necessary records.
Issues Involved:
1. Correctness of lower authorities' action treating the assessee's claims of Section 80-IA and Section 80HHC deductions as double deductions. 2. Whether the Assessing Officer followed the tribunal's remand directions in line with the Special Bench decision in the case of Hindustan Mint and Agro Products Private Limited. Detailed Analysis: 1. Correctness of Lower Authorities' Action: The core issue revolves around the correctness of the lower authorities' decision treating the assessee's claims of Section 80-IA and Section 80HHC deductions as double deductions, which were deemed not allowable. The CIT(A)'s detailed discussion noted that the appellant, a public limited company engaged in the manufacture and sale of bulk drugs and pharmaceutical formulations, had its scrutiny assessments completed for various assessment years (AYs 1999-2000, 2001-02, 2002-03, and 2004-05). The CIT(A) upheld the Assessing Officer's decision, which was based on the tribunal's earlier remand order directing the AO to follow the Special Bench decision in Hindustan Mint and Agro Products Private Limited. The CIT(A) highlighted that the legislative intent behind Section 80IA(9) was to prevent taxpayers from claiming more than 100% deductions on the profits of the same undertaking under different sections of Chapter VIA. This was supported by the CBDT Circular No.772 dated 23-12-1998. The CIT(A) also referenced judicial decisions, including the Delhi High Court and Kerala High Court, which supported the view that deductions under Section 80IA should be reduced from the eligible profits before computing deductions under Section 80HHC. 2. Compliance with Tribunal's Remand Directions: The tribunal's remand order had directed the Assessing Officer to ascertain if the deduction under Section 80HHC was computed in line with the Special Bench decision in Hindustan Mint and Agro Products Private Limited. The Assessing Officer, in the consequential orders, followed this directive and concluded that the deduction allowed under Section 80IA should be reduced from the eligible profits before allowing the deduction under Section 80HHC. However, the tribunal noted that the assessee's appeals had been pending since 2013, with multiple adjournments awaiting the Supreme Court's decision in ACIT Vs. Micro Labs Ltd. The Supreme Court's dismissal of the Revenue's Special Leave Petition (SLP) on 17-09-2018 meant that the issue had attained finality in favor of the assessee, indicating that the twin claims of Section 80HHC and Section 80-IA do not amount to double deduction. The tribunal emphasized that judicial discipline requires adherence to the Supreme Court's decision, which overrides the tribunal's earlier remand order and the Special Bench decision. Consequently, the tribunal accepted the assessee's grievance in principle and directed the Assessing Officer to finalize the computation as per law, while allowing the assessee's appeals for statistical purposes. Conclusion: The tribunal's judgment ultimately favored the assessee, recognizing that the twin claims under Section 80HHC and Section 80-IA do not constitute double deduction, in line with the Supreme Court's decision. The matter was remanded back to the Assessing Officer for final computation, ensuring compliance with the highest judicial authority's ruling.
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