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TMI Blog2021 (10) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... he methodology as provided in Section 80HHC (3), the question of restricting the deduction in terms of Section 80AB would not arise. That Section 80AB(2) the restriction of deduction is on gross total income and in such circumstances, restriction on the total profit of business was not at all justified. This decision of the Hon‟ble Bombay High Court squarely covers the issue in favour of the assessee and in view thereof, the Ld. CIT(Appeal) has provided relief to the assessee. - Decided in favour of assessee. - ITA Nos. 2738 to 2741 & 2743/PUN/2017, ITA No. 2742/PUN/2017 - - - Dated:- 6-10-2021 - Shri R.S.Syal, VP And Shri Partha Sarathi Chaudhury, JM For the Revenue : Shri A.M Mahadevan Krishnan For the Assessee : Shri Kishor B. Phadke ORDER PER BENCH : These bunch of six appeals preferred by the Revenue emanates from the separate order of the Ld. CIT (Appeal)-2, Kolhapur dated 03.10.2017 04.10.2017 for the assessment years 2010-11 to 2014-15 as per the following common grounds of appeal on record: 1 . The CIT(A) has erred in allowing deduction u/s. 80IA(4)(iv) on gross total income which in assessee's case includes inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 33,292/-. In this backdrop, consequent upon the information received by the Assessing Officer from revenue audit objection that while passing the order dated 01.01.2013 u/s.143(3) of the Act determining total income at ₹ 42,38,227/-, erroneously, gross total income inclusive of income from salary and income from other sources respectively ₹ 20,40,000/- and ₹ 1,80,33,292/- has been considered while allowing the deduction claimed by the assessee u/s.80IA of the Act. 5.1 Therefore, the Assessing Officer was of the opinion from legal aspect of the case, this quantum of income of ( ₹ 20,40,000/- + ₹ 1,80,33,292/-) = ₹ 2,00,73,292/- could not be held to be derived from eligible business and hence, excess deduction u/s.80IA of the Act has been allowed to the extent of ₹ 2,00,73,292/- and therefore, the excess deduction of the same amount of ₹ 2,00,73,292/- has been allowed which is actually income of the assessee that has escaped assessment for the assessment year 2010-11 and accordingly, proceedings u/s.147/148 of the Act were initiated. 5.2 The issue of re-opening of assessment has been separately dealt with by the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n held that in computing the total income of the assessee, there is no basis in the provisions of section 80IA to restrict the expression to total income derived from an eligible business. Having regard to the provisions noted above, the submission urged on behalf of the revenue could not accepted. In this scenario, it was held by the Ld. CIT(Appeals) placing reliance on the referred decision of the Hon‟ble Bombay High Court as follows : 5 .The appellant claimed before me that the issue is covered in his case by the decision of the Hon ble Bombay High Court in the case of Tridoss Laboratoreis Ltd. 328 ITR 448 ( Bom.). It has been held in Tridoss as under: Section 80IA provides that where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (4) (the eligible business), 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 of an amount equal to hundred per cent of the profits and gains derived from such business for ten consecutive assessment years. The sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount to ₹ 17,40,33,719 which according to him was profit of the business, it was held that once the income had been determined by applying the methodology as provided in section 80HHC (3), the question of restricting the deduction in terms of section 80AB would not arise. This is so in terms of section 80AB as the assessee was claiming deductions on its export profits alone, which was included in computing its gross total income. Section 80HHC(3) was introduced when the provisions of Section 80AB were already on the statute. Even upon reading the provisions of section 80AB, the determination of the amount as provided therein would have to be effected for the purpose of computing the deductions under each of the respective sections specified in Part C. As such, while computing the deduction under section 80HHB, 80 HHC, 80 HHD, 80-IA and 80 IB etc. once would have to apply section 80AB. In terms of section 80AB(2), the restriction of the deduction is on the gross total income and in such circumstances, the restriction on the total profit of business is not at all justified. From the above it is evident that the restriction of deduction on total profits of busines ..... X X X X Extracts X X X X X X X X Extracts X X X X
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