9911796707
TMI Blog2000 (2) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... in Motilal Pesticides (I) Pvt. Ltd. v. CIT [1994] 207 ITR 636, is assailed before us. It concerns interpretation of section 80HH of the Income-tax Act, 1961 (for short the "Act"), and pertains to the assessment years 1979-80 and 1980-81. The question of law which the High Court answered in the affirmative and in favour of the Revenue and against the appellant is as under : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was not entitled to deduction under section 80HH of the Income-tax Act, 1961, on the gross profit of Rs. 34,30,035 (liquid section) but on the net income therefrom, for the assessment year 1979-80 ?" The appellant had claimed relief under section 80HH in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P.) Ltd.'s case [1979] 118 ITR 243 (SC) that deduction is to be allowed on the gross total income and not on the net income. But then the decision in Cloth Traders (P.) Ltd.'s case [1979] 118 ITR 243 (SC) was overruled in Distributors (Baroda) P. Ltd. v. Union of India [1985] 155 ITR 120 (SC). After the decision in Cloth Traders (P.) Ltd.'s case [1979] 118 ITR 243 (SC), two sections 80AA and 80AB were introduced by the Finance (No. 2) Act, 1980. While section 80AA was to have retrospective effect with effect from April 1, 1968, section 80AB was to have operation with effect from April 1, 1981. Section 80AA had the effect of effacing the decision of this court in Cloth Traders (P.) Ltd.'s case [1979] 118 ITR 243, which had interpreted sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the gross income. But then, in all fairness, Mr. Ramamurti also referred to another decision of this court in H. H. Sir Rama Varma v. CIT [1994] 205 ITR 433, where this court observed that on a parity of reasoning with section 80AA as given in Distributors (Baroda) P. Ltd.'s case [1985] 155 ITR 120 (SC), it must be held that section 80AB was enacted to declare the law as it always stood in relation to the deductions to be made in respect of the income specified under the head "C" of Chapter VI-A of the Act. Mr. Ramamurti also referred to a circular dated May 10, 1982, issued by the Central Board of Direct Taxes in support of his submission but then this circular has since been withdrawn. That being the position we affirm the judgment of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
