ASSTT. CIT V. MOTI POLYMERS PVT. LTD.

TAXAP/589/1999

AI Insights

This case involves a Tax Appeal filed by the Assistant Commissioner of Income Tax against Moti Polymers Pvt. Ltd., concerning the interpretation and application of sections 80HH and 80I of the Income Tax Act, 1961. The appeal was initially filed in 1999 but was dormant for over a decade before being restored. The core issue was whether the Appellate Tribunal was correct in allowing separate deductions under sections 80HH and 80I on the gross total income of the assessee. The Gujarat High Court referenced a similar case (Tax Appeal No. 588/1999) and precedents from the Supreme Court and other High Courts, which had consistently ruled in favor of the assessee on this issue.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 757931 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 19-11-2014
• Assessment Year: misc
• Other Referred Cases: Joint Commissioner of Income Tax Vs. Mandideep Engineering And Packaging. Ind. P. Ltd., J.P. Tobacco Products P. Ltd. Vs. C.I.T., CIT v. Alpine Solvex P. Ltd., CIT v. Amod Stamping
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: MAUNA BHATT
• Keywords: Appellate Tribunal; Deductions; Income Tax; Section 80HH; Section 80I; Tax appeal
• Section: 80HH; 260A; 80I

Judgement Text

"O/TAXAP/589/1999 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 589 of 1999 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ ASSTT. CIT....Appellant(s) Versus MOTI POLYMERS PVT. LTD.....Opponent(s) ================================================================ Appearance: MRS MAUNA M BHATT, ADVOCATE for the Appellant(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Page 1 of 5 O/TAXAP/589/1999 JUDGMENT Date : 19/11/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. This Tax Appeal u/s.260A of the Income­tax Act, 1961 has been filed against the judgment and order dated 02.08.1999 passed by the Income Tax Appellate Tribunal, Ahmedabad in ITA No.2800/AHD/1993. 2. Though the appeal was filed way back in the year 1999, it was not moved for more than ten years. Thereafter, MCA No.80/2000 was filed for restoration of the appeal, which was dismissed for default and vide order dated 07.03.2011, the appeal was restored on file. 3. The cognate appeal being Tax Appeal No.588/1999, arising out of the same judgment and order of the Appellate Tribunal, came to be decided by this Court vide judgment and order dated 16.06.2011. For ready reference, the said judgment is reproduced hereunder; “(1) In this appeal under section 260A of the Income Tax Act, 1961 (the Act) the appellant­revenue has challenged the order dated 02.08.1999 made by the Income Tax Appellate Tribunal, Ahmedabad Bench 'C', Ahmedabad in I.T.A. No.2800/Ahd/1993 for Assessment Year 1991­92. (2) While admitting the appeal on 11.09.2000, this Court had formulated the following substantial question of law: “Whether the Appellate Tribunal is right in law and on facts Page 2 of 5 O/TAXAP/589/1999 JUDGMENT in directing to allow separate relief under sec. 80HH and 80I of the Act?” (3) Mr. R. K. Patel, learned Advocate, appearing on behalf of the respondent has invited the attention of the Court to the decision of the Supreme Court in the case of Joint Commissioner of Income Tax Vs. Mandideep Engineering And Packaging. Ind. P. Ltd. (2007) 292 ITR 1 (S.C.), to submit that the controversy involved in the present case stands concluded in favour of the assessee by the said decision. It was pointed out that the Supreme Court in the said decision had taken note of the fact that against the decision of the Madhya Pradesh High Court in the case of J.P. Tobacco Products P. Ltd. Vs. C.I.T. (1998) 229 ITR 123 wherein it had held that both the sections are independent and, therefore, the deductions could be claimed both under sections 80HH and 80I on the gross total income, a special leave petition had been filed before the Supreme Court which came to be dismissed on the ground of delay. The Supreme Court further observed that decision of the Madhya Pradesh High Court in the case of J.P. Tobacco Products P. Ltd. Vs. C.I.T. was followed by the same High Court in the case of CIT v. Alpine Solvex P. Ltd. in I.T.A. No.92 of 1999 decided on May 2, 2000 and that special leave petition against the same was dismissed by the Supreme Court. The Court further observed that the aforesaid view had been followed repeatedly by different High Courts against which no special leave petitions were filed meaning thereby that the Department had accepted the view taken in the said judgments. One of the judgments referred to was CIT v. Amod Stamping, (2005) 274 ITR 176 (Guj). Inviting attention to the impugned order of the Tribunal and, more to particularly paragraph 13 thereof, it was pointed out that the Tribunal has placed reliance upon the decision of the Madhya Pradesh High Court in the case of J.P. Tobacco Products P. Ltd. (supra) which stands confirmed by the above referred the decision of the Supreme Court. The attention of the Court was also invited to the above referred decision of the Gujarat High Court in the case of CIT Vs. Amod Stamping, (supra), to submit that this Court had also decided the controversy in favour of the assessee by holding that while computing the profits for the Page 3 of 5 O/TAXAP/589/1999 JUDGMENT purpose of availing deduction under section 80­I of the Act, the profits and gains of the assessee's business are not required to be reduced by the deduction admissible under section 80HH of the Act. (4) Mr. M. R. Bhatt, learned Senior Advocate for the appellant, is not able to dispute the aforesaid position of law. In the circumstances, it is not necessary to set out the facts and contentions in detail. (5) A perusal of the impugned order of the Tribunal indicates that the Tribunal has placed reliance on the decision of the Madhya Pradesh High Court in the case of J.P. Tobacco Products P. Ltd. Vs. C.I.T. which view has not been disturbed by the Supreme Court as noted hereinabove. In the circumstances, the view adopted by the Tribunal being in consonance with the above referred decision of the Madhya Pradesh High Court as well as of this High Court in the case of CIT Vs. Amod Stamping (supra), the question is required to be answered in the affirmative, that is, in favour of the assessee and against the revenue. The Appellate Tribunal is right in law in directing to allow separate relief under sections 80HHA and 80I of the Income Tax Act, 1961. The appeal is, accordingly, dismissed with no order as to costs.” 4. Since this Tax Appeal arises out of the same judgment and order of the Appellate Tribunal, it will be governed by the aforesaid judgment rendered in T.A. No.588/1999 decided on 16.06.2011 and hence, no elaborate reasons are assigned in this matter. 5. In view of the above, the appeal is dismissed in terms of the judgment and order rendered in T.A. No.588/1999 decided on 16.06.2011. (K.S.JHAVERI, J.) Page 4 of 5 O/TAXAP/589/1999 JUDGMENT (K.J.THAKER, J) Pravin/* Page 5 of 5 "