Independent Income-tax deductions under Sections 80-I and 80HHC upheld; Section 80HHC reduction not required before computing Section 80-I benefit.

Sections 80-I and 80HHC of the Income-tax Act were treated as independent deductions, so the amount admissible under Section 80HHC did not have to be reduced before computing deduction under Section 80-I. Applying that principle to the assessment year in question, the High Court upheld the Tribunal's view that the assessee could claim both deductions without inter se adjustment. The question of law was answered in favour of the assessee and against the department.

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Issues: Whether the deduction under Section 80-I of the Income-tax Act, 1961 could be allowed without first reducing the deduction admissible under Section 80HHC of the Income-tax Act, 1961.

Analysis: The appeal arose under Section 260-A of the Income-tax Act, 1961 in relation to assessment year 1989-90. The question turned on the relationship between Sections 80-I and 80HHC. Relying on the principle that both provisions operate independently of each other, the Court found that the assessee was entitled to the benefit of both deductions and that the Tribunal had correctly directed that the amount deductible under Section 80HHC need not be reduced for computing deduction under Section 80-I.

Conclusion: The question of law was answered in favour of the assessee and against the department.

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