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TMI Blog2014 (1) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... of NIL. While examining the assessment records it was found that the assessment order is prima facie erroneous in so far as it was prejudicial to the interest of the revenue. The assessee company had disclosed income from manufacturing of finished leather from raw hides, and leather products from finished leather. The sale included exports. During the course of reassessment proceedings, the computation of deduction under Section 80HHC was examined. After examining the issue a deduction amounting to Rs.2,03,00,948/- was allowed as against Rs.1,98,42,299/- claimed by the assessee company in its return of income. Apart from allowing the deduction under Section 80HHC, the deduction under Section 80IA amounting to Rs.30,28,909/- was also worked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the restrictions made by the provisions of Section 80IA (9) of the I.T. Act, 1961?" Shri Shambhu Chopra submits that Section 80HHC and 80IC are independent and thus deduction on the gross income will be allowable under both the sections. He submits that to that effect in Joint Commissioner of Income Tax v. Mandideep Eng. & Pkg. Ind. (P) Ltd., (2007) 292 ITR 1 (SC) the Supreme Court has put the controversy at rest, upholding the judgment of J.P. Tobacco Products (P) Ltd. v. CIT, (1998) 229 ITR 123 against which special leave petitions were dismissed. Similar view was taken by various High Court, including this Court in CIT v. Lucky Laboratories Ltd., (2006) 200 CTR (All) 305. The question whether the deduction under Section 80HHC and Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 80IA (9) relate to allowance of deduction and not to computation of deduction. In our view the Income Tax Appellate Tribunal committed a mistake in setting aside the order under Section 263 of the Income Tax Act on the ground that AO had one of the two courses permissible in law to make the assessment. The Commissioner had rightly found that the A.O. had erred in allowing the deduction under Section 80IA on the reducing balance after deduction under Section 80HHC. The Commissioner acted within his jurisdiction under Section 263 of the Income Tax Act, 1961 to revise the order. The question still remains as to whether the Assessing Officer had appreciated the restrictions under Section 80IA (9) of the Act, which provides that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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