ITAT Grants Assessee Deductions: 80IB & 80HHC Appeals Allowed for AY 2000-01 to 2002-03

The ITAT allowed the assessee's appeals related to deduction under sections 80IB and 80HHC for assessment years 2000-01 to 2002-03. The ITAT ruled in favor of the assessee regarding the deduction under section 80IB, disagreeing with the Assessing Officer's decision. Additionally, the ITAT directed the AO to allow deductions under section 80HHC without reducing the 80IB deduction amount first, following the interpretation provided by the Bombay High Court in Associated Capsules (P) Ltd. All appeals of the assessee were considered allowed for statistical purposes by the ITAT on July 1, 2011.

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Issues involved: Appeals against orders of CIT(A) related to assessment years 2000-01 to 2002-03, concerning deduction under sections 80IB and 80HHC of the Act.

Issue 1 - Deduction under sections 80IB and 80HHC:
The assessee claimed deduction under both sections 80IB and 80HHC. The Assessing Officer rejected the 80IB deduction, but the ITAT ruled in favor of the assessee. However, when allowing 80HHC deduction, the AO reduced the 80IB deduction amount first, resulting in a lower net deduction under 80HHC. The method used was challenged by the assessee, leading to appeals and petitions under section 154, which were rejected by the CIT(A) citing a Special bench decision. The Bombay High Court's decision in Associated Capsules (P) Ltd was relied upon by the assessee, emphasizing that section 80IA(9) affects deduction allowability, not computation. The ITAT set aside the CIT(A) orders and directed the AO to allow deductions as per the Bombay High Court's explanation.

Conclusion:
All appeals of the assessee were treated as allowed for statistical purposes by the ITAT on July 1, 2011.

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