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TMI Blog1995 (10) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer under section 143(3) of the Act. 3. The assessee had, however, filed an appeal for assessment year 1982-83 in which it was granted some relief. With a view to giving consequential effect to the order of ld. CIT(A) in the assessee's case for assessment year 1982-83, a rectificatory order was passed by the Assessing Officer under section 154 of the Act for assessment year 1983-84 on 24-11-1988. In this order, the total income was computed at Rs. 6,21,610. It was at this stage that the assessee pointed out to the Assessing Officer that it should be allowed necessary relief under section 80HH of the Act. The assessee took two actions, on the one hand, the assessee moved an application under section 154 dated 9-2-1989, a copy of which is available at page 15 of the assessee's compilation in which it was stated in the order passed under section 154 on 24-11-1988 relief under section 80HH had not been allowed which may be allowed at Rs. 8,05,830 being 20% of the income from industrial undertaking. The implication was that such a claim was not preferred at the time of original assessment because it was a loss case but since the income as a result of order dated 24- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... audited. The ld. counsel for the assessee in this regard has invited our attention to pages 17 and 18 of the assessee's compilation in which a comparison has been attempted between sections 80HH(2) and 80J(4) of the Act. The ld. counsel, however, pointed out that in the case of deduction under section 80HH, one more condition has to be fulfilled, namely, that the industrial undertaking should be situated in a backward area. 5. The submission of the ld. counsel was that in this very case, the assessee has been allowed deduction under section 80J in the past and even for assessment year 1983-84 deduction of Rs. 3,05,012 was claimed under section 80J which was allowed to be carried forward. It was, therefore, submitted that since the conditions laid down under section 80J(4) were duly fulfilled the conditions as per section 80HH(2) also stood fulfilled. The ld. counsel for the assessee further pointed out that in this case, the assessee was allowed central subsidy of Rs. 10,22,651 in the immediately preceding year which was available only to those industrial undertakings which were set up in backward areas. Pointing to page 8 of the balance-sheet as on 31-8-1982, it was submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court decision in CIT v. Caps and Caps [1989] 179 ITR 235 for the proposition that where no claim was made under section 80J in prior years because there were no profits but there was material on record to support the claim, then deduction under section 80J was bound to be allowed by the ITO by taking into account the special deduction available in prior assessment years. 9. Reliance was also placed on the ratio of the Calcutta High Court decision in West Bengal State Warehousing Corpn. v. CIT [1986] 157 ITR 149. That was a case of a warehousing corporation. From the record it would appear that for all the subsequent years, exemption under section 83 of the Income-tax Act had been allowed to the assessee. For assessment year 1967-68, however, the assessee who had earned a sum of Rs. 5,72,323 from warehousing did not claim exemption in respect of this amount either before the ITO or the appellate authorities. The assessee claimed the exemption in rectification proceedings. The High Court held that the exemption had to be granted in rectification proceedings. 10. As regards the cases referred to by the AO and ld. CIT(A), it was submitted that now that the Supreme Court had lai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l material and clear data on the record or not for allowing relief under section 80HH of the Act. There is no doubt that the assessee is an industrial undertaking. There is also no doubt that in the earlier assessment years it has been granted relief under section 80J of the Act which means that all the conditions as laid down under section 80J(4) stand fulfilled. Those conditions are in pari materia with the conditions laid down in section 80HH(2) of the Act. Even for assessment year 1983-84, the assessee claimed relief under section 80J to the extent of Rs. 3,05,012 which was allowed by the Assessing Officer and since it could not be set-off against the income of the year, it was allowed to be carried forward. The only distinguishing feature between sections 80HH and 80J appears to be that industrial undertaking in respect of relief under section 80HH must be located in a backward area. The ld. counsel has demonstrated that the assessee got central subsidy in this case precisely because the industrial undertaking at Sangrur was located in the backward area. The amount of capital subsidy received is reflected in the balance-sheet as on 31-8-1982 and the figure for the immediately ..... X X X X Extracts X X X X X X X X Extracts X X X X
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