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of <h1>Court allows s. 80HH deduction before s. 32AB, unit-wise assessment crucial</h1> <h3>Commissioner of Income Tax Versus R.B. Jodha Mal Bishan Lal</h3> Commissioner of Income Tax Versus R.B. Jodha Mal Bishan Lal - [2006] 202 CTR 289 Issues:Interpretation of provisions of s. 80HH and s. 32AB of the IT Act, 1961 regarding deduction calculation and applicability in case of multiple industries owned by the assessee.Analysis:The case involved a dispute regarding the deduction under s. 80HH of the IT Act, 1961, in relation to profits from industrial undertakings. The Assessing Officer (AO) had allowed the deduction under s. 80HH only on the profit from various leases after reducing the deduction under s. 32AB. However, the CIT, Amritsar, allowed the deduction under s. 80HH before deducting the amount admissible under s. 32AB. The Tribunal upheld the CIT's decision, stating that the deduction under s. 32AB cannot be reduced from the profits and gains for claiming relief under s. 80HH.The court analyzed the provisions of s. 80HH and s. 32AB to determine the correct approach. It was highlighted that s. 80HH allows a deduction of 20% from profits and gains derived from industrial undertakings forming part of the gross total income. The deduction under s. 32AB is also discussed, which allows a deduction equal to 20% of the profit of eligible business or profession as computed in the assessee's account.The court emphasized that the deduction under s. 80HH should be calculated based on the profits and gains derived from a single industrial undertaking, not considering profits from other industries owned by the assessee. Referring to a Supreme Court decision, the court stated that each industry must be treated as a separate unit for the purpose of claiming relief under s. 80HH, ensuring that the deduction is based on the profit of that specific industrial unit without reducing it by losses from other industries.Therefore, the court ruled in favor of the assessee, concluding that the deduction under s. 80HH should be allowed before considering deductions under s. 32AB. The judgment clarified that each industrial unit should be assessed independently for claiming relief under s. 80HH, ensuring that the deduction is based on the profit of that specific unit without being affected by losses from other industries owned by the assessee.This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the court's interpretation of the relevant provisions of the IT Act, 1961 in the context of calculating deductions under s. 80HH and s. 32AB for industrial undertakings owned by the assessee.
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