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TMI Blog2004 (1) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... /s Pawan Tyres Ltd., with the assessee-company. The facts are similar in the Tribunal order relied upon by the learned Authorized Representative, in which it was held that as both the companies were engaged in the same line of business, the judgment of the Hon'ble Supreme Court rendered in the case of CIT vs. Bombay Dyeing Manufacturing Co. Ltd. (1996) 132 CTR (SC) 217 : (1996) 219 ITR 521 (SC) is applicable and the issue was decided in favour of the assessee. As in the present case also, there is no dispute about the fact that both the companies are engaged in the same line of business and, hence, respectfully following this Tribunal order and the judgment of Hon'ble Supreme Court, we reverse the order of the lower authorities on this point. The assessee succeeds on this ground. 5. The second ground of appeal is as under: "The learned CIT(A) legally erred in confirming the disallowance of Rs. 2,57,351 towards the foreign travelling expenses relating to wives of the directors of the company. The learned CIT(A) legally erred in not appreciating the facts of the case." 6. Briefly stated, the facts are that an amount of Rs. 2,57,351 was incurred in connection with foreign t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , has necessarily some social aspects also. Neither the assessing authority nor the appellate authority has got a case that the foreign tour made by the CMD is not for any business purposes or that the accompaniment of the wife is not for the purpose of fulfilling the social aspects aforementioned. The authorities below also do not have a case that the accompaniment of the wife of the CMD did not result in any advantage to the assessee. It is also relevant to note that the board of directors of the company, by resolution, has permitted the same." Reliance was also placed on the order of the Special Bench of the Tribunal rendered in the case of Glaxo Laboratories (India) Ltd. vs. ITO. In this order also, the judgment in the case of T.S. Hajee Moosa Co. was considered. The judgment of the Hon'ble Gujarat High Court rendered in the case of Bombay Mineral Supply Co. (P) Ltd. vs. CIT (1985) 153 ITR 437 (Guj) was also considered. This judgment of Hon'ble Gujarat High Court was also relied upon by the AO. The relevant para 72 appearing on page Nos. 251 and 252 of the ITD is reproduced below: "In both the above cases, the assessee was unable to prove that the wife accompanied the h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered in the case of Brooke Bond India Ltd. vs. CIT (1997) 140 CTR (SC) 598 : (1997) 225 ITR 798 (SC). In view of this, this ground of the assessee fails. 12. The fourth ground of the appeal is as under: "The learned CIT(A) legally erred in not allowing the claim of the appellant under s. 80-I of the IT Act amounting to Rs. 71,63,385." 13. This ground is not pressed by the learned Authorized Representative of the assessee and, hence, dismissed as not pressed. 14. The fifth ground of appeal is as under: "The learned CIT(A) legally erred in confirming the restriction of claim of the appellant under s. 80HHC of the IT Act. The appellant had claimed the deduction under s. 80HHC at Rs. 66,36,262 whereas the same was allowed by the AO at Rs. 46,31,802. The learned CIT(A) legally erred in applying the provisions of s. 80AB of the IT Act, 1961, for determining the claim of the appellant under s. 80HHC of the IT Act. The learned CIT(A) further erred in confirming the action of the AO in determining the profit of the appellant at Rs. 3,83,60,332 after set off of brought forward business loss, unabsorbed depreciation and unabsorbed investment allowance for the purpose of dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt rendered in the case of CIT vs. Sundaravel Match Industries (P) Ltd. (2000) 163 CTR (Mad) 625 : (2000) 245 ITR 605 (Mad), but this judgment is in respect of s. 80HH and not s. 80HHC and hence, not applicable in this case. Reliance was also placed on judgment of Hon'ble apex Court rendered in the case of H.H. Sir Rama Verma vs. CIT (1994) 116 CTR (SC) 55 : (1994) 205 ITR 433 (SC). Here also, the issue involved was s. 80T and not s. 80HHC and, hence, this judgment is also of no help to Revenue. The learned Departmental Representative also relied upon the order of Hon'ble jurisdictional High Court rendered in the case of IPCA Laboratories Ltd. vs. Dy. CIT (2001) 170 CTR (Bom) 568 : (2001) 251 ITR 401 (Bom). In this case, there was net loss from export of goods. Ratio involved in the present case is different and hence this judgment is also of no help to Revenue in the present case. 17. In rejoinder, it was argued by the learned Authorized Representative of the assessee that the contention of the learned Departmental Representative is not correct that the judgment of Hon'ble Andhra Pradesh High Court in the case of Gogineni Tobacco Ltd. has been reversed by the Hon'ble apex Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because the judgment of the Hon'ble Kerala High Court in the case of A.V. Thomas has also been followed. Moreover, since in the case of Gogineni Tobacco Ltd. also Hon'ble apex Court has only held that the question of law arises and has not decided anything against the ratio laid down in this judgment of Shirke Construction Equipments Ltd., this judgment is very much applicable and respectfully following the same, we hold that s. 80AB of the IT Act for determining the claim under s. 80HHC is not applicable because s. 80HHC is a complete code in itself and we also hold that for the purpose of determining deduction under s. 80HHC, only the profit for the year should be considered without setting off of brought forward business loss, unabsorbed depreciation and unabsorbed investment allowance. Accordingly, we reverse the orders of the lower authorities on this issue and direct the AO to recompute the deduction under s. 80HHC in the light of the above. The assessee succeeds on this ground. 19. An additional ground No. 6 was raised by the learned Authorized Representative of the assessee, which is as under: "(i) The learned CIT(A) erred in holding that while determining the deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible for deduction under s. 80-I, deduction under s. 80-I should be calculated after deducting deduction under s. 32AB. 24. As against this, it was contended by the learned Authorized Representative that the issue of deduction under s. 80-I has been set aside by the learned CIT(A) and, therefore, this issue shall also be looked into by the AO afresh. Reliance was placed on the judgment of CIT vs. Tarun Udyog (1991) 99 CTR (Ori) 181 : (1991) 191 ITR 688 (Ori), wherein it was held that relief under s. 80HH has to be allowed on the profits of the industrial undertaking before deducting investment allowance therefrom. 25. We have considered the rival submissions, perused the materials on record and have gone through various case law cited before us, and we are in agreement with the learned Authorized Representative of the assessee that since the issue of deciding the claim of the assessee for deduction under s. 80-I has been set aside, the Revenue's ground of appeal should also be set aside for fresh decision by the AO. In this view of the matter, we set aside this issue also to the file of AO with the direction to consider this his aspect also while deciding the issue of deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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