TaxTMI 
TaxTMI 
2009 (6) TMI 124
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....) introduced with effect from April 1, 1999 is to be seen. 2. The earlier Special Bench (ITAT "D" Bench) at Chennai in the case of Asst. CIT v. Rogini Garments [2007] 294 ITR (AT) 15 was constituted to consider similar controversy when conflict of views between different benches of Income-tax Appellate Tribunal was found. The Special Bench after hearing both the parties had held that where deduction under section 80HHC as also under section 80-IA are claimed for the assessment years 1999-2000 and 2002-03, then relief allowed under section 80-IA is to be deducted from profits and gains of the assessee's business on which relief under section 80HHC of the Act is to be computed. After the above Special Bench, the hon'ble Madras High Court in the case of SCM Creations v. Asst. CIT [2008] 304 ITR 319 decided the same question and took a view which some benches thought was different from the view taken by the Special Bench in the case of Rogini Garments [2007] 294 ITR (AT) 15. It was thought by these benches that Rogini Garments is no more applicable after the decision of SCM Creations v. Asst. CIT [2008] 304 ITR 319. The referral Bench hearing these appeals noticed that Delhi....
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....tion. It appears that deduction claimed was allowed. Subsequently, notice under section 148 dated November 19, 2004, was issued. In response thereto, the assessee again filed return showing nil income. The case was taken as scrutiny assessment case. It was found that the assessee in the relevant period had manufactured and exported menthyl acetate, mint terpins, basil oil and its allied products to the foreign buyers and had claimed to be 100 per cent. exporter. It claimed deduction under section 80HHC at 50 per cent. of the gross total income, i.e., at Rs. 35,26,121. The deduction under section 80-IB was claimed at Rs. 13,22,907 being 30 per cent. of total business profit of the undertaking. While computing deduction under section 80HHC the deduction allowed under section 80-IB was not taken into consideration (deducted) in the claim. 5. The Assessing Officer raised a query as to why deduction under section 80HHC be not reduced by the amount of deduction allowed under section 80-IB in the light of the provision of section 80-IA(9) read with section 80-IB(13). The assessee, in response to the above query, and while opposing above action, relied upon the provisions of section 80A....
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.... Income-tax (Appeals) further observed that the Assessing Officer did not refer to any specific case law on the issue and has relied on the decision of the Supreme Court in the case of CIT v. Sterling Foods [1999] 237 ITR 579 and Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84. However, these cases were not directly on the issue. On the other hand, the learned Commissioner of Income-tax (Appeals) found that the hon'ble Jaipur Tribunal in the case of Toshica Creation [2005] 96 TTJ 651, the hon'ble Bangalore Bench in the case of Mittal Clothing Company v. Deputy CIT [2005] 4 SOT 626, the hon'ble Delhi Bench, SMC in the case of ITO v. R. V. Diamond Jewellers (P.) Ltd. decided on November 3, 2005, and the Delhi Tribunal in the case of Deputy CIT v. Eltek SGS (P.) Ltd. [2006] 10 SOT 178 had held that the exclusion of deduction under section 80-IB for computing deduction under section 80HHC was not permissible. In the light of the aforesaid decisions of the jurisdictional Tribunal, the Assessing Officer was directed to allow deduction under section 80HHC without reducing or considering deduction allowed under section 80-IB of the Act. 9. The Revenue, be....
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....on 80-IA of the Income-tax Act. Reliance before the Bench was placed on the decision of the Income-tax Appellate Tribunal, Delhi Bench in the case of Deputy CIT v. Eltek SGS (P.) Ltd. [2006] 10 SOT 178. The Bench's attention was also drawn to the decision of the apex court in the case of Britannia Industries Ltd. v. CIT [2005] 278 ITR 546 wherein it has been held that when the language of the statute is clear and unambiguous, the courts are to interpret the same in its literal sense and not to give a meaning which would cause violence to the provisions of the Statute. Reference was also made to the decision of the Bangalore Bench of the Tribunal in the case of Mittal Clothing Company v. Deputy CIT [2005] 4 SOT 626. On the basis of the decision of the apex court in the case of Bajaj Tempo Ltd. v. CIT [1992] 196 ITR 188, it was submitted that a taxing statute granting incentive for promoting growth and development should be liberally construed. Some other decisions of the Benches in which it was held that while computing deduction under section 80HHC, deduction allowed under section 80-IA was not to be deducted, were cited before the Special Bench. The Bench has also noted in det....
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.... observations that the above case was one of the interveners in the Special Bench case of Rogini Garments [2007] 294 ITR (AT) 15 (Chennai) and on further appeal, the hon'ble High Court reversed the view of the Tribunal. Thus, the decision of the Special Bench was taken as superseded and no more valid or applicable. Other circumstances which led to the constitution of the Special Bench have already been noted. 16. Shri R. S. Meena, the learned Commissioner of Income-tax (Departmental representative) has contended that the language employed in section 80-IA(9) and section 80-IB(13) of the Income-tax Act, 1961 ("the Act") is plain, simple, clear and unambiguous, and in order to determine the true and correct meaning of the provisions contained in sections 80-IA(9) and 80-IB(13), no words or meaning should be added thereto, and only the language used therein ought to be considered to ascertain the proper meaning and intent of the Legislature. The learned Departmental representative pleaded that plain reading of sections 80-IA(9) and 80-IB(13) suggests that where any amount of profits and gains is claimed and allowed as deduction under section 80-IA/80-IB for any assessment year,....
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....dy allowed under sections 80-IA and 80-IB, and the deduction under section 80HHC will be allowed on the remainder only. 18. In support of the contention that a fiscal statute shall have to be interpreted on the basis of the language used therein and not de hors the same; and no words ought to be added and only the language used therein ought to be considered so as to ascertain the proper meaning and intent of the legislation, the learned Departmental representative has relied upon the following decisions : (i) Orissa State Warehousing Corporation v. CIT [1999] 237 ITR 589 (SC) ; (ii) Patil Vijaykumar v. Union of India [1985] 151 ITR 48 (Karn) ; (iii) IPCA Laboratory Ltd. v. Deputy CIT [2004] 266 ITR 521 (SC) ; (iv) Indian-Rayon Corporation Ltd. v. CIT [1998] 231 ITR 27 (Mumbai) ; (v) Smt. Tarulata Shyam v. CIT [1977] 108 ITR 345 (SC) ; (vi) Kota Co-operative Marketing Society Ltd. v. CIT [1994] 207 ITR 608 (Raj) ; (vii) M. P. Poddar (HUF) v. Appropriate Authority [1999] 240 ITR 372 (Delhi) ; (viii) Keshavji Ravji and Co. v. CIT [1990] 183 ITR 1 (SC) ; and (ix) Federation of Andhra Pradesh Chambers o....
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.... (iv) CIT v. Rochiram and Sons [2004] 271 ITR 444 (Raj) ; and (v) ITO v. Anil Kumar Rastogi Income-tax Appellate Tribunal, Delhi "G" Bench (I. T. A. Nos. 1542 and 1543/Del/2007 (assessment years 2001-02 and 2002-03) and 1544 and 1545/Del/2007 (assessment years 2003-04 and 2004-05). 21. At this stage, the learned Departmental representative pointed out that an impression has been sought to be created that the issue that falls for consideration by this Special Bench is covered by the decision of the hon'ble Madras High Court in the case of SCM Creations v. Asst. CIT [2008] 304 ITR 319 but this is factually incorrect. He submitted that the decision of the hon'ble Madras High Court in the case of SCM Creations [2008] 304 ITR 319 have not taken cognizance of the material changes brought about by the inserting sub-section (9) in section 80-IA of the Act with effect from April 1, 1999. He further submitted that learned counsel appearing before the hon'ble Madras High Court did not refer to the provisions of section 80-IA(9) and, hence, their lordships had no occasion to look into or examine the change made with effect from April 1, 1999. However, it was emp....
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....ect position of law. It was argued that in the absence of clear statutory indication to the contrary, the statute should not be read so as to permit an assessee two deductions. The learned Departmental representative then, pleaded that this proposition that no double deduction on the same amount could have been intended by the Legislature should be applied in the present case, and, consequently, the issue raised before the Special Bench be decided in favour of the Revenue and against the assessee. Submission for the assessee 23. Learned counsel for the assessee, Shri Piyush Kaushik, advocate has submitted that section 80-IA/80-IB and section 80HHC operate in fields to serve different objectives. The objective behind section 80-IA/80-IB being to provide stimulus to undertakings engaged in the business of infrastructure development etc. whereas the objective behind section 80HHC is to provide stimulus in export business. He further submitted that section 80-IA/80-IB are undertaking based sections, wherein it is necessary to have an undertaking engaged in the specified activities in order to avail deduction under these sections. Whereas section 80HHC is an activity based section....
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....ort business. He further submitted that the provisions of section 80HHC nowhere permits reduction of profits to the extent deduction is claimed under section 80-IB or 80-IA while computing the profit eligible for deduction under section 80HHC of the Act. In this context, he then submitted that the provision of section 80-IA(9) does not contain a non-obstante clause so as to supersede the specific provision of section 80HHC or for that matter any other section under the heading "C" of Chapter VI-A. Learned counsel for the assessee then submitted that if the provision of section 80-IA(9) are to be read as reducing from the profits eligible for deduction under section 80HHC the deduction allowed under section 80-IA or 80-IB, then such interpretation would be in manifest contradiction to the provisions of section 80AB which override all the provisions of Chapter VI-A and which specifically provide by way of non-obstante clause that in computing deduction under any section under the heading "C" of Chapter VI-A, the income on which such deduction shall be entitled shall be the income computed under the provisions of this Act before making any deduction under Chapter VI-A. Learned counsel....
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....han v. Sunni Central Board of Waqf, U.P., AIR 1959 SC 198. "It is well settled that in construing the provisions of a statute courts should be slow to adopt a construction, which tends to make any part of the statute meaningless or ineffective; an attempt must always be made so to reconcile the relevant provisions as to advance the remedy intended by the statute." (iv) D. Sanjeevayya v. Election Tribunal, AIR 1967 SC 1211. "It was held in this case that provisions of one section cannot be used to defeat those of another unless reconciliation is impossible. It was held that provisions of statute should be read so as to harmonize with one another." 27. Learned counsel for the assessee then submitted that in order to harmonize the interpretation of provision of section 80-IA(9), section 80HHC and section 80AB, it would be useful to look into the legislative intent and purpose of introducing section 80-IA(9) of the Act, which was inserted by the Finance (No. 2) Act 1998, with effect from April 1, 1999. (it was originally sub-section of the (9A) old section 80-IA). He then made a reference to the Circular No. 772 dated December 23, 1998, of the Central Boar....
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....rendering the provision of section 80HHC and also section 80AB completely otiose being a highly unfair and unwarranted situation. He then submitted that if by claiming deduction under section 80HHC on gross basis the total deduction availed by the assessee under Chapter VI-A does not exceed 100 per cent. of the profit and gains of the undertaking then the assessee's claim under section 80HHC at gross basis as per the methodology prescribed under section 80HHC should not be disallowed. He then submitted that the effect should be given to the provision of sections 80HHC and 80AB and also to the legislative intent behind introducing section 80-IA(9) so that the inconsistencies between sections 80AB, 80-IA(9) and 80HHC are removed and the matter is brought to its logical conclusion. 31. With reference to the scope and meaning of Board Circular No. 772 dated December 23, 1998, learned counsel for the assessee submitted that the said circular has been highly misread by the Special Bench of the Income-tax Appellate Tribunal in the case of Rogini Garments [2007] 294 ITR (AT) 15 (Chennai) while observing that based on the said circular, the assessee was justifying a claim of more tha....
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.... by the assessee under Chapter VI-A does not exceed 100 per cent. of the profits and gains of the undertaking, then the assessee's claim under section 80HHC on gross basis as per methodology prescribed under section 80HHC should not be disallowed. 33. To support his aforesaid contentions, learned counsel for the assessee made a reference to similar controversy arising in the context of sections 80HH and 80-I of the Act, which has been stated to be addressed and concluded by various High Courts including the hon'ble Supreme Court and the Central Board of Direct Taxes. 34. Learned counsel for the assessee then submitted that the controversy arising about the meaning and scope of section 80HH(9) has been considered and resolved by the hon'ble Madhya Pradesh High Court in the case of J. P. Tobacco Products Pvt. Ltd. v. CIT [1998] 229 ITR 123. Relevant observations of the High Court shall be discussed hereinafter. 35. It was further submitted by learned counsel for the assessee that based on the reasoning laid down by the hon'ble Madhya Pradesh High Court in the case of J. P. Tobacco Products Pvt. Ltd. [1998] 229 ITR 123 the division benches of the Income-tax Ap....
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....ns : (i) Sections 80HH and 80-I are independent sections operating in different fields. (ii) If the assessee fulfils conditions of both these sections then it should entitled for deduction under both these sections ; (iii) Section 80-I nowhere permits reduction from the profits of the undertaking the amount of deduction allowed under section 80HH. 39. Applying the same analogy advanced in the context of sections 80HH and 80-I, learned counsel for the assessee submitted that similar proposition (as set out below) would apply to the present controversy arising in the context of sections 80-IA/80-IB and 80HHC of the Act : (i) Section 80-IB/80-IA and section 80HHC are independent sections operating in different fields ; (ii) If the assessee fulfils conditions of both these sections then it should be entitled for deduction under both these sections ; and (iii) Section 80HHC nowhere permits reduction from the profits of the undertaking the a mount of deduction availed under section 80-IA/ 80-IB of the Act. 40. The above cases were not at all considered and addressed in the decision of Special Bench of the Income-tax Appellate Tr....
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....2008] 304 ITR 319 did not consider the post amendment situation after insertion of sub-section (9A)/(9) in section 80-IA, learned counsel for the assessee submitted that the decision of the hon'ble Madras High Court cannot be said to be sub-silentio as because it has followed the decision of the Supreme Court in the case of Joint CIT v. Mandideep Eng. and Pkg. Industries Pvt. Ltd. [2007] 292 ITR 1 and the decision of the Madhya Pradesh High Court in the case of J. P. Tobacco Products Pvt. Ltd. [1998] 229 ITR 123, where the court had at length considered the situations in which a restrictive clause in one section can influence the claim of deduction of other sections. He then submitted that it would thus, be not appropriate for a Tribunal to treat the decision of the High Court as sub-silentio or per incurium, and the jurisdiction to do so vests only with the Supreme Court or larger Bench of the same High Court, and the Tribunal is bound by the decision of even non-jurisdictional High Court in the absence of any contrary decision. 43. It was further pointed out by learned counsel for the assessee that as against the decision of the Special Bench in the case of Rogini Garments....
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....favour of the assessee in T. C. No. 344 of 2004, (since reported as Deputy CIT v. Chola Textiles P. Ltd. [2008] 304 ITR 256 (Mad)) wherein this court has held as follows (page 257 supra) : (underlined by us to emphasis) '5. It is submitted across the Bar by learned counsel appearing for either side that the very issue has been considered and held against the Revenue by the Madhya Pradesh High Court in the case of J. P. Tobacco Products P. Ltd. v. CIT reported in [1998] 229 ITR 123. It has also been further submitted that the Bombay High Court also has taken the same view in the case of CIT v. Nima Specific Family Trust reported in [2001] 248 ITR 29. The judgment of the Madhya Pradesh High Court has been taken to the Supreme Court and the Supreme Court in Joint CIT v. Mandideep Engineering and Packaging Indus tries P. Ltd. [2007] 292 ITR 1, has rejected the S. L. P. by giving the following reasons : 'The Madhya Pradesh High Court in J. P. Tobacco Products P. Ltd. v. CIT reported in [1998] 229 ITR 123 took the view that both the sections are independent and, therefore, the deductions could be claimed both under sections 80HH and 80-I on the gross total incom....
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....ips of the Supreme Court did not allow the Revenue to pursue its SLP as SLP filed against the decision of the Madhya Pradesh High Court in the case of J. P. Tobacco Products Pvt. Ltd. [1998] 229 ITR 123 was dismissed and other decisions of different High Courts on the same issue were not challenged. In the second case, the hon'ble Madras High Court applied the decision in the case of Joint CIT v. Mandideep Eng. and Pkg. Industries Pvt. Ltd. [2007] 292 ITR 1 (SC). There is no separate discussion on the controversy involved. Besides, as we would presently show, above cases dealt with different situations arising under different provisions. We, therefore, do not find any support for the case of the assessee in these decisions. In the case of SCM Creations [2008] 304 ITR 319 their lordships merely followed and applied the earlier decisions as per the agreement and prayer made before their lordships by the parties. No reference was made to the statutory provision nor their lordships were called upon to decide any issue. The counsel appearing on behalf of the Revenue had fairly conceded the issue without taking into account or without bringing to the notice of their lordships, the ch....
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....t where the asses see is entitled also to the deduction under section 80-I or section 80J in relation to the profits and gains of an industrial undertaking or the business of a hotel to which section 80HH applies, effect shall first be given to the provisions of section 80HH. According to learned counsel, the said sub-section (9) of section 80HH cannot be read to say that for according deductions under section 80-I or 80J, the deductions allowed under section 80HH are required to be subtracted from the profits and gains of the industrial undertaking and then allowance is to be given at the rates provided in section 80-I or 80J on the amount of gross total income so reduced. Learned counsel for the Department has, however, argued that the purpose of sub-section (9) of section 80HH is apparently to first allow deductions admissible under section 80HH and then to reduce the gross total income by the deductions so allowed and consider the income so reduced for the purpose of allowing deductions under section 80-I or 80J. Sub-section (9) of section 80HH, as it stood prior to the insertion of section 80-I by the Finance (No. 2) Act, 1980, with effect from April 1, 1981,....
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....e hon'ble High Court (page 124) : "Whether the Tribunal is right in law in holding that the deduction under section 80-I is to be allowed on balance of income after deducting the relief under section 80HH from gross total income and not from gross total income as defined in section 80B(5) of the Act?" 50. Their lordships of the hon'ble High Court answered the question in favour of the assessee. It is to be seen that there was no provision in the assessment year 1984-85 like section 80-IA(9) which has been introduced by the Finance (No. 2) Act, 1998, with effect from April, 1999, only. This has been specifically noted by their lordships in the judgment as is evident from the portion highlighted. The Revenue had relied in the cited case on the provisions of sub-section (9) of section 80HH which, according to the court, did not serve the purpose. The said provision was as under : "80HH. (9) In a case where the assessee is entitled also to the deduction under section 80-I or section 80J in relation to the profits and gains of an industrial undertaking or the business of a hotel to which this section applies, effect shall first be given to the provisions of ....
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....tion both under section 80HH and section 80-I of the Act on the gross total income. The Assessing Officer first allowed the deduction under section 80HH. The deduction under section 80-I was allowed after deducting the relief separately allowed under section 80HH. On further appeal, the Tribunal held that the assessee was to be allowed deduction under section 80-I without deducting the relief allowed under section 80HH. The said view of the Tribunal was challenged in reference before the hon'ble Rajasthan High Court. Their lordships upheld the view by observing as under (headnote of 251 ITR) : "Chapter VI-A, which consists of sections 80A to 80V of the Income-tax Act, 1961, becomes operative on reaching the last stage of computation of income from different sources. The expression 'gross total income', in various sections of Chapter VI-A, has been assigned a special meaning to mean total income computed in accordance with the provisions of the Income-tax Act, 1961, except any provision under Chapter VI-A. Computation of gross total income of the industrial undertaking for the purpose of deduction under section 80HH and section 80-I operates independently and ha....
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....ction under sections 80HH and 80-I are independent deductions and are to be allowed with reference to the gross total income?" 56. The Legislature by the Finance (No. 2) Act, 1998, with effect from April 1, 1999 introduced the following provision as sub-section (9) of section 80-IA : "80-IA. Deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc.- (9) Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.-Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be." 57. The provision has been made applicable to section 80-IB by insertion of sub-section (13) noted above. 58. The above provision seems to have been introduced after taking note of observations of their lordships in the case of J. P. Tobacco Products Pvt. Ltd.....
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....y declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent. Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law." 60. The above principles have been again applied in large number of cases by the Supreme Court and by various High Courts. For the sake of convenience, we can refer to the case of State of U.P. v. Synthetics and Chemicals Ltd. [1991] 4 SCC 139 ; 87 STC 289. 61. Further, in the case of CIT v. Kelvinator of India Ltd. [2002] 256 ITR 1 (Delhi) the Full Bench observed as under (page 17): "A decision as is well known, is an authority for the proposition that it decides and not what can logically be deduced therefrom. A point not raised nor argued at the Bar cannot be said to be the ratio of the decision." 62. The Full Bench also observed as under (page 15) : "It is a well settled principle of interpretation of statute that the entire statute should be read as a whole and the same has to be considered thereafter chapter by....
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....the Tribunal, which have taken a view contrary to the view of Rogini Garments did not correctly appreciate the legal position. The mere fact, that SLP against the decision in the case of J. P. Tobacco [1998] 229 ITR 123 (MP) and other decisions noted above was not filed or was dismissed, does not improve the situation in favour of the assessee. None of the decisions of the hon'ble High Courts and the hon'ble Supreme Court are applicable here as provision of section 80-IA(9), with which we are concerned, was not relevant in those cases. For the aforesaid reasons, we hold that the Special Bench decision in the case of Rogini Garments is fully applicable. In the light of the above discussion and when comprehensive decision of the Special Bench is already available on record we are of the view that further discussion of the question is not necessary. However, to meet the ends of justice, we would briefly comment on other submissions of the assessees and the interveners. 65. It was submitted that the computation of deductions under both the provisions like sections 80-I and 80HHC is to be made independently and for this purpose, reference was made to section 80AB of the Incom....
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....its and gains shall not be allowed under any other provisions" are quite clear and unambiguous and are to be given effect to as rightly contended by the Revenue. The profits or gains of industrial undertaking, which has already been allowed as a deduction under section 80-IA, such profit (to the extent) cannot be taken into consideration for allowing deduction under any other provision of this Chapter "C". If profit which has already been allowed as a deduction is again taken into consideration for computing deduction under any other provision referred to above, then restriction (a) above is disregarded and ignored. It cannot be done without doing violence to the language of the provision. We see no justification for adopting a course prohibited by the Legislature. It is not possible to ignore the restriction placed as (a) nor is it possible to accept that in Circular No. 772, there is a suggestion to ignore restriction (a) mentioned above. As per the settled law, courts and Tribunals must see the mandate of the Legislature and give effect to it as rightly argued by the Revenue. Therefore, restriction (a) above has to be respected and followed. 68. The statutory provision of sec....
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....on (9A), such profits and gains (to the extent) shall not be allowed under any other provision of the relevant Chapter. For example, if total profit of undertaking is Rs. 100 and 20 per cent. is allowed as a deduction under section 80-IA or 80-IB, then for purposes of other provisions like section 80HHC, on such 20 per cent. of profit, no deduction can be allowed. The deduction under other sections has to be computed after reducing such profit of 20 per cent. In other words, it will be computed with reference to 80 per cent. of the profit. Such deduction cannot be governed by section 80AB alone as it is a case in which deductions under more than one section of Chapter VI-A is to be allowed. Adjustment of deductions under various sections is to be made. It is not a case where provision before making any deduction under Chapter VI-A is applicable. Therefore, provision of section 80AB is of no assistance in resolving the problem in hand. 69. Learned counsel for the assessee further contended that where the Legislature intended to deduct the amount of deduction out of some other deduction, a different phraseology was used. Learned counsel referred to sub-section (5) of section 80HHB....
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....and cannot be read de hors one and other. The Special Bench in the case of Rogini Garments has held that the restriction imposed by sub-section (9) on account of 80-IA is to be read in all the provisions of Chapter VI-A and it is not possible to ignore the restriction that profit and gains claimed and allowed as exempt under sub-section (9), (to the extent allowed) cannot be allowed under any other provision of Chapter "C". The above construction in reading restriction in all relevant provisions under Chapter "C", in our opinion, is leading to no contradiction or absurdity and is reasonable. It is the legislative policy not to allow repeated deduction of same profit under sections of deductions in Chapter VI-A. We, therefore, see no conflict or contradiction in giving effect to the legislative mandate. Doing otherwise would, no doubt, be doing violence to the clear language. The argument is accordingly rejected. 73. The learned representative for the assessee and interveners also laid stress to notes of objects and reasons pertaining to the introduction of subsections (9), and (13) in section 80-IA, and section 80-IB. Our attention was also drawn to the Circular of Central Board....
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....80HHC requiring deduction of amount of business profit allowed as deduction under section 80-IA/80-IB. The amount on which deduction under section 80HHC is to be allowed is prescribed in the Explanation to section 80HHC. He emphasized that the purpose and object of inserting sub-section (9) of section 80-IA was to restrict total deduction available under Chapter VI-A to the amount of total eligible profit of the business. He also placed certain illustration in his submissions to show how taxpayer should not be entitled to deduction of more than 100 per cent. of eligible profit. 76. Shri Vohra also drew our attention to difference in language used in section 80HH(9A) and 80HHA(7) where the expression used is different and is, "no part of the consideration or of income shall qualify for deduction for any assessment year under any such other provision". He argued that the above language clearly provided that deduction allowed under section 80HH or 80HHA shall not qualify for deduction under any other provision of Chapter VI-A. The Legislature deliberately used different language under section 80-IA which clearly showed that the purpose of section 80-IA(9) not to deduct the deductio....
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....hanism of computing the deduction under section 80HHC(3) of the Income-tax Act. He further submitted that where the assessee was found that the provision allowing deduction of assumption is applicable, then those provisions are to be interpreted liberally. Reliance was placed on the decision of the Supreme Court in the case of P. R. Prabhakar v. CIT [2006] 284 ITR 548. 80. We have already dealt with the above contention. In our considered opinion, all statutory provisions are inter-related and are part of one scheme. This cannot be read de hors one and another. The restriction imposed in section 80-IA(9)/80-IB(9A) are to be read in all sections and given effect to. This would only give harmonious reading. The decision of the Supreme Court relied upon by Shri Vohra also support the above proposition although they do not deal with section 80-IA/80-IB of the Act. We are unable to find any substance in the above argument of learned counsel. 81. Shri Vohra, on the applicability of the decision of the hon'ble Madras High Court in the case of SCM Creations [2008] 304 ITR 319, submitted that principle of sub-silencio rule could not be applied to the decision. The aforesaid decisi....