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TMI Blog1992 (2) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment ?" Briefly stated the facts as found by the Tribunal are that the assessee is engaged in the manufacture and sale of hand tools. It declared a net profit in respect of the assessment year 1969-70 of Rs. 39,92,472 and claimed relief under section 80-1 of the Income-tax Act, 1961. The Income-tax Officer made certain adjustments while arriving at the figure on which deduction under section 80-I was admissible. An appeal was filed by the assessee where two contentions were raised. The contention with reference to relief claimed under section 80-I was not dealt with by the Appellate Assistant Commissioner with the result that when further appeal was filed by the assessee to the Tribunal, the Tribunal sent back the matter to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 2,19,617 and the weighted expenditure of Rs. 12,549, the relief under section 80-I should have been granted on the income of Rs. 45,49,712. In order to appreciate the contention, it is necessary to refer to the provisions of section 80-1 as they stood at the relevant time. The said provision was as follows : "80-1. Deduction in respect of profits and gains from priority industries in the case of certain companies. - (1) In the case of a company to which the section applies, where the gross total income includes any profits and gains attributable to any priority industry, there shall be allowed, in accordance with and subject to the provisions of this section, a deduction from such profits and gains of an amount equal to eight per c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Orient Paper Mills Ltd.'s case [1983] 139 ITR 763 supports the assessee. We, however, find that the decision in Cloth Traders' case [1979] 118 ITR 243 (SC), on which the Calcutta High Court had placed reliance, was overruled by the Supreme Court itself in the case of Distributors (Baroda) P. Ltd. v. Union of India [1985] 155 ITR 120. Furthermore, the decision of the Supreme Court in the case of Cambay Electric Co. [1978] 113 ITR 84 is indistinguishable. In that case, the Supreme Court was dealing with the interpretation of section 80E which was analogous to the provisions of section 80-1 in this case. Referring to the question of unabsorbed depreciation and development rebate being deducted while computing profits, the Supreme Court obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of unabsorbed depreciation and unabsorbed development rebate will have to be deducted before arriving at the figure that will become exigible to the deduction of 8% contemplated by section 80E(1). On this construction, therefore, the High Court, in our view, was right in deducting unabsorbed depreciation and development rebate aggregating to Rs. 2,54,613 from Rs. 8,02,126 and holding the balance of Rs. 5,47,513 as being exigible to the 8% deduction. " In our opinion, merely because certain aspects may not have been urged before the Supreme Court cannot be a reason for not applying the ratio of the said decision. The observations of the Supreme Court in Cambay Electric Supply Industrial Company's case [1978] 113 ITR 84 are very clear and c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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