Section 80HH deduction must be re-examined with section 80AB when computing relief after investment allowance

Deduction under section 80HH had to be examined with section 80AB, because the Tribunal had computed relief without considering whether investment allowance had to be deducted from income for that purpose. The HC held that the Tribunal's view could not stand without applying section 80AB and the relevant precedent, so the issue required fresh determination in accordance with law. The controversy over the correct basis for the section 80HH deduction was therefore remitted to the Tribunal for reconsideration on merits.

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Issues: Whether deduction under section 80HH of the Income-tax Act, 1961 was to be computed on the basis of gross income or net income after taking into account investment allowance, and whether section 80AB required reconsideration of the Tribunal's view.

Analysis: The Tribunal had upheld computation of deduction under section 80HH without deducting investment allowance, but it had not considered section 80AB of the Income-tax Act, 1961. The Court noted that the determination of relief under section 80HH depended on the proper application of section 80AB and that the Tribunal's decision required re-examination in the light of that provision and the relevant precedent.

Conclusion: The question was not finally answered on merits, and the matter was remitted to the Tribunal for fresh decision in accordance with law after considering section 80AB and the cited authority.

Final Conclusion: The controversy regarding the correct basis for deduction under section 80HH was sent back for reconsideration by the Tribunal.

Ratio Decidendi: Where the Tribunal has not considered section 80AB while deciding the basis of deduction under section 80HH, the matter requires remand for fresh determination in accordance with law.

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