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TMI Blog2001 (6) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... ons 80HH and 80J of the Income-tax Act, 1961, by the assessee were allowable in full as claimed? (2) Whether, the Appellate Tribunal has been right in law in confirming the view taken by the Commissioner of Income-tax (Appeals), in directing the Income-tax Officer to allow both the deductions under sections 80J and 80HH of the Income-tax Act, 1961, in full without reducing from the deduction under section 80J of the Act the amount of deduction under section 80HH of the Act?" The circumstances in which the questions have been referred to this court, in a nutshell, are as under: The assessee established a new industrial undertaking in a backward area and therefore it was getting benefit of deduction under the provisions of sections 80HH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount deductible under section 80J of the Act. Being aggrieved by the order passed in appeal by the Commissioner of Income-tax (Appeals), the Revenue filed an appeal before the Tribunal. The appeal filed by the Revenue was dismissed by the Tribunal for the reason that the Commissioner of Income-tax (Appeals), while allowing the appeal, had followed an order passed by the Tribunal in the case of the assessee for the assessment year 1978-79. Before adverting to the legal position, it is important to note certain undisputed facts. At present we are concerned with the assessment year 1981-82. So far as the assessment year 1978-79 is concerned, the Tribunal, in an appeal filed before it had come to a conclusion that the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l income of the assessee, a deduction from such profits and gains of an amount equal to twenty per cent. thereof." "80J. Deduction in respect of profits and gains from newly established industrial undertakings or ships or hotel business in certain cases.-(I) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel, to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains (reduced by the deduction, if any, admissible to the assessee under section 80HH or section 80HHA) of so much of the amount ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age of the capital employed by the assessee in certain industries. Mr. Mihir Joshi, learned advocate appearing for the Revenue, has submitted that the Tribunal was in error when it directed the Assessing Officer to allow deduction under the provisions of sections 80HH and 80J in full to the assessee for the relevant assessment year. According to him, as per the provisions of section 80J of the Act, a total limit has been prescribed for the purpose of deduction under sections 80HH, 80HHA and 80J. According to him, section 80J prescribes an overall ceiling, which is equivalent to 6 per cent. of the capital employed by the assessee in the new industry. In other words, according to him total benefit of deduction under the provisions of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit under section 80J is to be given for a period of five years as provided in section 80J(2) of the Act. It has been further submitted by him that it is not in dispute that except for the assessment year 1981-82, from the assessment years 1978-79 to 1982-83 the assessee has been given benefit as interpreted by the Tribunal. Thus, out of five years, for four assessment years the assessee has got the benefit and the view expressed by the Tribunal for the years 1979-80 and 1982-83 has been confirmed by this court as well as by the Supreme Court. He has therefore submitted that for the assessment year in question also, the assessee should get deduction as ordered by the Tribunal. We have heard the learned advocates and have also gone t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on different considerations. The benefit of deduction under section 80HH is given to those industrial units which establish their industries in a backward area whereas so far as section 801 is concerned, the benefit under the said section is given to new industrial units. Moreover, the manner in which the benefit of deduction is to be given under the said sections is also absolutely different. So far as section 80HH is concerned, it depends upon the amount of gross profits whereas deduction under the provisions of section 80J is based upon the quantum of capital employed in the new industry. Otherwise also, we do not find anything to justify the submission of Mr. Joshi. Even if we look at the legislative history, section 80J was brought in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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