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TMI Blog2016 (7) TMI 1303X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be computed independently and with an only rider that the total deduction should not exceed more than 100% of the eligible profit computed under any of the provisions independently as well as cumulatively ? 3. Whether of the facts and in the circumstances of the case the Tribunal has erred in law in following the decision of the Special Bench in the case of Rohini Garments which is not a good law in view of the decision of Hon'ble Madras High Court in the case of SCM Creations ?" 3. Mr.Karia, learned advocate for the appellant submitted that a similar issue came up before the Honourable Apex Court and the same is referred to the Larger Bench of the Supreme Court by decision in the case of ACIT v. Micro Labs Ltd. reported in [2016] 380 ITR 1 (SC), therefore, present appeals may be adjourned to some future date. 4. Though the aforesaid position is not in dispute, Mr.K.M.Parikh, learned advocate for the respondent submitted that, for the time being, the issue involved in these appeals is covered by the decision of this Court in the case of Commissioner of Income Tax v. Atul Intermediates, reported in [2015] 373 ITR 638 (Gujarat), and prayed that these appeals may also be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If we accept the interpretation of the assessee that only effect of subsection (9) of section 80IA would be to limit the maximum permissible deduction under section 80HHC to the profits and gains of the eligible business, we would be completely ignoring the first part of the sub-section. In other words, the earlier part of sub-section would be rendered completely redundant, purposeless and otiose. It is well settled that the Legislature cannot be expected to have used words and expressions, which have no meaning or effect. Limiting the scope of application of sub-section (9) of section 80IA only to restricting the claim of deduction under section 80HHC or for that matter under the provisions of sub-chapter C to Chapter VI would amount to giving no effect to the earlier portion of the sub-section, which specifically provides for making a disallowance of deduction claimed by the assessee under various provisions contained in sub-chapter C profit or gain of an undertaking or enterprise which has already been claimed and allowed under section 80IA. In case of Aswini Kumar Khose v. Aravinda Bose reported in AIR 1952 SC 369 the Supreme Court observed that it is not a sound principle of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its effect only to disallowing deduction over and above the profit or gain of an enterprise or undertaking. Second aspect is that such provision does not have a non-obstante clause. What would be the effect of these two forces emerging from sub-section (9) of section 80IA needs to be appreciated. In our opinion, the combined effect of these two factors would be that sub-section (9) of section 80IA of the Act would operate as along as there is nothing contrary contained in any other provisions of subchapter C of Chapter VI. In the present case, our enquiry would be limited to finding out if there is anything contrary provided in section 80HHC of the Act. Thus, if there is any indication of legislative intent to allow the full deduction under section 80HHC of the Act irrespective of the provision contained in subsection (9) of section 80IA, such legislative intent must prevail. On the other hand, if we find that section 80HHC of the Act is not immune to outside influence, full play of the provision of sub-section (9) of section 80IA must be allowed, even if it means restricting the claim of an assessee for deduction under section 80HHC of the Act. In other words, merely because subse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d therein was immune from any outside influence or that the provision was impregnable by any other statute or enactment. Accepting any such theory would lead to incongruous results. Even the assessee concedes that subsection (9) of section 80IA would operate as to limiting the combined deductions to a maximum of the profits and gains from an eligible business of the undertaking or enterprise. If section 80HHC contained a protective shell making it immune from any outside influence, even this effect of sub-section (9) of section 80IA could not be applied. This would completely render the provisions of sub-section (9) of section 80IA redundant and meaningless. 28. It is true, as pointed out by the counsel for the assessee that in different provisions the Legislature has used different language for restricting or limiting the claim of deductions. The use of language in statutory provisions in such complex situations must be peculiar to every situation the Legislature may seek to meet with. Merely because in some of the provisions certain disallowances are expressed in different language would not by itself mean that sub-section (9) of section 80IA was aimed to have restricted and li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plied at the very stage to assessee's claim for deduction under section 80HHC of the Act is considered. While computing such deduction the effect of sub-section (9) of section 80IA would have to be given. We do not think that in the process we are tinkering with the formula for computation of eligible profit for deduction under section 80HHC of the Act. We have noticed that different formulae have been provided for manufacturing exporter and trader and in case of an assessee whose exports comprise of both the sources. It is, therefore, at the stage of sub-section (3) of section 80HHC effect of sub-section (9) of section 80IA would apply. It is true that clause (baa) to explanation to section 80HHC defines a term `profits of the business'. While working out the business profits as specified therein, in terms of sub-section (9) of section 80IA the profit or gain which had already been allowed deduction to the extent mentioned therein would have to be ignored." 6. In view of above observations of this Court, present appeals are dispose of and the questions posed for our consideration are decided in favour of the revenue and against the assessee. However, the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X
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