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TMI Blog2019 (4) TMI 862X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Appellate Tribunal whereby, Annexure C order passed by the Commissioner of Income Tax (Appeals) came to be affirmed and the appeal preferred by the Revenue came to be dismissed. 2. The sequence of events reveals that the assessment in the case of the respondent Assessee Company, who is engaged in the business of manufacture and sale of automobile tyres and tubes for the year 1995-96 was completed under Section 143 (3) of the Income Tax Act on 31.03.1998, fixing the total income at Rs. 24,28,66,234/- and the tax was assessed accordingly. The commissioner of Income Tax(Appeals), on challenge, made some interference. Later, the assessment came to be re-opened in terms of Section 143(3) r/w. Sec.147 of the Income Tax Act and the total in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have heard rival submissions and considered the facts and materials on record. Sub-section (5) to section 80IA mandates that notwithstanding anything contained in any other provision of this Act, the profits and gains of an eligible business to which the provisions of subsection( 1) apply shall, for the purposes of determining the quantum of deduction under that sub-section for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the Assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year upto and including the assessment year for which the determination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Apex Court reported in (2004)266 ITR 521 (SC) [IPCA Laboratory Ltd. vs. Deputy Commissioner of Income Tax] and (2007)291 ITR 380(SC) [Commissioner of Income Tax vs. Shirke Construction Equipment Ltd.]. 6. Heard Mr. Christopher Abraham, the learned Standing Counsel for the Revenue and Shri Joseph Markose, the learned Sr. Counsel appearing for the respondent Assessee as well. 7. The only dispute is with regard to the calculation effected by the authorities concerned. To put it more clear, whether the extent of deduction (workable at 30%) is to be made with reference to Rs.6,46,55,496/-, as done by the Assessing Officer while passing Annexure A or should it be on the sum of Rs.7,16,68,439/-. The course followed by the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.71668439/-), since the income from all sources as finally accounted for, reflects only a lower figure of Rs. 6,46,55,496/-, 30% has to be worked out with reference to the aforesaid total income of Rs.64655496/-, which is stated as the mandate of Section 80AB of the Act. We find it difficult to accept the above proposition for the reasons noted below. 10. For easy understanding and ready reference, Sections 80IA and 80AB of the Income Tax Act are extracted below: Section 80IA " (1) Where the gross total income of an Assessee includes any profits and gains derived from any business of an industrial undertaking or an enterprise referred to in sub-section (4) (such business being hereinafter referred to as the eligible business) there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me as profit derived by the Assessee from the eligible business. It does not say that 30% has to be calculated with reference to the total income of the Unit from all other sources; nor does it say, 30% of the profit from the eligible business or 30% of the total income, whichever is lower. 12. Similarly, Section 80AB only says the mode of computation with regard to the deduction required to be made or allowed under any of the Sections of Chapter VIA under the Head-C-Deductions in respect of certain payments. The terminology in the said provision clearly gives an idea that computation has to be made in accordance with the provisions of the Income Tax Act before making any deduction under Chapter VIA. This means, the Assessee will not be el ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business profit from the eligible business, is thoroughly wrong and misconceived. 16. The crucial question to be considered in this appeal is whether the stipulation under Section 80AB of the Income Tax Act would govern the deduction of 30% of the profit under Section 80IA of the Act derived by the Assessee from the eligible business to the extent of reducing the benefit with regard to the total income declared from all sources]. The stand of the Assessee is supported by ruling of the Division Bench of this court in Commissioner of Income Tax vs. Jose Thomas [(2002) 253 ITR 553 (Ker.)]with regard to deduction under Section 80HHC of the Income Tax Act where the ratio of the dictum is same. 17. Since there is no ambiguity in the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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