Conditional tax deduction under section 80K upheld where entitlement under section 80J had to be established first.

Deduction under section 80K was treated as conditional on first establishing the company's entitlement to deduction under section 80J. The Tribunal's direction to ascertain that foundational entitlement before granting relief was found legally proper, because the assessee could not obtain the 80K benefit unless the prior 80J basis existed. On that reasoning, the Allahabad HC held that the Tribunal had committed no error and declined to answer the question referred under section 256(1), treating it as not arising from the Tribunal's order.

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Issues: Whether the Tribunal's direction to allow relief under section 80K only after ascertaining that the company was entitled to deduction under section 80J was legally justified, and whether the question referred under section 256(1) of the Income-tax Act, 1961, arose from the Tribunal's order.

Analysis: The deduction claimed under section 80K was dependent upon the company's entitlement to the benefit of deduction under section 80J. Unless that foundational fact was first established, the assessee's claim for deduction could not be allowed. The Tribunal's direction merely required such ascertainment before relief was granted, and the court found no error in that approach. In view of the nature of the Tribunal's order, the referred question was treated as not arising from it.

Conclusion: The Tribunal's direction was held to be perfectly legal and justified, and the question referred was declined to be answered.

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