Reliable Dyechem Pvt, Ltd., Jetpur V. The Addidtional Commissioner of Income Tax, Special Range-1, RAJKOT-GUJARAT

ITA 168/RJT/2011

• Counselvise Citation: 16824914 RSA 2011
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 1998-1999
• Appeal Filed On: 27-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: J C RANPURA
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI N.R.S. GANESA N (JM) I.T.A. NO.168/RJT/2011 (ASSESSMENT YEAR 1998-99) RELIABLE DYECHEM PVT LTD VS THE ADDL CIT, SR- 1 MATAWA STREET RAJKOT JETPUR PAN : AABCR0091C (APPELLANT) (RESPONDENT) DATE OF HEARING : 05-09-2011 DATE OF PRONOUNCEMENT : 09-09-2011 APPELLANT BY : SHRI JC RANPURA RESPONDENT BY: SHRI MK SINGH O R D E R PER AL GEHLOT, AM THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT(A)- XX, AHMEDABAD DATED 09-02-2011 PERTAINING TO ASSESS MENT YEAR 1998- 99. 2. THE EFFECTIVE GROUND RAISED IN THE APPEAL IS THA T THE CIT(A) ERRED ON FACTS AS ALSO IN LAW IN CONFIRMING AOS ACTION OF R EDUCING DEDUCTION CLAIMED U/S 80HHC OF THE ACT FROM RS.21,10,477 TO R S.14,25,070 BY SUBTRACTING THE QUALIFYING AMOUNT WITH DEDUCTION AL LOWED U/S 80IA OF THE ACT. THE CIT(A) CONFIRMED THE VIEW OF THE ASSESSIN G OFFICER FOLLOWING ITA NO.168/RJT/2011 2 ORDERS OF ITAT SPECIAL BENCH (CHENNAI) AND DELHI IN CIT VS ROGINI GARMENTS 111 TTJ (CHENNAI) (SB) 274 AND CIT VS HIN DUSTAN MINT & AGRO PRODUCTS (P) LTD 123 TTJ (DEL)(SB) 577 3. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERI AL AVAILABLE ON RECORD. THE LD.COUNSEL FOR THE ASSESSEE RELIED UPO N THE JUDGMENT OF THE BOMBAY HIGH COURT IN THE CASE OF ASSOCIATED CAPSULE S (P) LTD VS DCIT & ANR 332 ITR 42 (BOM) WHEREIN IT HAS BEEN HELD THAT UNLESS IT IS SPECIFICALLY PROVIDED BY THE STATUTE, THE PROFITS OF THE BUSINES S FOR THE PURPOSE OF S.80HHC CANNOT BE REDUCED BY ANY AMOUNT SAVE AND EX CEPT THE AMOUNT SPECIFIED IN CL.(BAA) OF S.80HHC ITSELF AND THAT SE CTION 80-IA(9) DOES NOT EXPRESSLY OR IMPLIEDLY PROVIDE THAT THE AMOUNT OF P ROFIT ALLOWED AS DEDUCTION UNDER S. 80-IA(1) SHOULD BE REDUCED FROM THE PROFITS OF THE BUSINESS FOR THE PURPOSE OF COMPUTING DEDUCTION UND ER S. 80HHC OF THE ACT. THE OBJECT OF S. 80-IA(9) BEING NOT TO CURTAI L THE DEDUCTIONS COMPUTABLE UNDER VARIOUS PROVISIONS UNDER HEAD C OF CHAPTER VI-A, IT IS REASONABLE TO HOLD THAT S. 80-IA(9) AFFECTS ALLOWAB ILITY OF DEDUCTION AND NOT COMPUTATION OF DEDUCTION. TO ILLUSTRATE, IF RS.100 IS THE PROFITS OF THE BUSINESS OF THE UNDERTAKING, RS.30 IS THE PROFITS A LLOWED AS DEDUCTION UNDER S. 80-IA(1) AND THE DEDUCTION COMPUTED AS PER S. 80HHC IS RS.80, THEN, IN VIEW OF S.80-IA(9), THE DEDUCTION UNDER S. 80HHC WOULD BE RESTRICTED TO RS.70, SO THAT THE AGGREGATE DEDUCTIO N DOES NOT EXCEED THE ITA NO.168/RJT/2011 3 PROFITS OF THE BUSINESS. THE LD.DR HAS NOT BROUGHT ANY OTHER CONTRA DECISION TO OUR NOTICE. IN VIEW OF THIS POSITION, WE, RESPECTFULLY FOLLOWING THE ABOVE JUDGMENT OF THE BOMBAY HIGH COURT, SET AS IDE THE ORDERS OF REVENUE AUTHORITIES AND DIRECT THE ASSESSING OFFICE R TO CALCULATE THE DEDUCTION U/S 80IA & 80HHC IN ACCORDANCE WITH ABOVE JUDGMENT OF BOMBAY HIGH COURT IN THE CASE OF ASSOCIATED CAPSULE S (P) LTD VS DCIT & ANR (SUPRA). 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 09-09-2011. SD/- SD/- (N.R.S. GANESAN) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT, DT : 09 TH SEPTEMBER, 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-XX, AHMEDABAD 4. THE CIT-I, RAJKOT 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT