TaxTMI 
TaxTMI 
TaxTMI 
2014 (6) TMI 769
X X X X Extracts X X X X
X X X X Extracts X X X X
....sly erred in law and on facts by passing order u/s. 263 of the I. T. Act, 1961 and by concluding in its order regarding mode of computation for determining amount of deduction u/s. 80 HHC and u/s. 80 I A of the I. T. Act, 1961. The appellant submits that allowable" amount as worked out by appellant and accepted by the assessing officer be upheld. 3. The brief facts of the case are that the Assessing Officer observed that the assessee had filed its return of income for Assessment Year 2003-04 on 13.11.2003 declaring total income of Rs 24,49,573/-. The Assessing Officer completed the assessment u/s. 143(3) on 28.10.2005 accepting the returned income. Thereafter reassessment order was passed on 24.12.2008 u/s. 143(3) read with section 147 of the I.T. Act wherein the Assessing Officer allowed the claim of deduction u/s. 80HHC and 80IB of the Act as claimed by the assessee. On perusal of record, the Commissioner of Income Tax observed that the Assessing Officer allowed deduction u/s.80HHC without reducing the profit of the business which was allowed U/S.80IB of the I.T. Act, relying on the decision of the Supreme Court and some High Courts. The decision of Hon'ble Supreme Court on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... are different. In the relied case, Hon'ble Supreme Court has held that 80HH & 801 are independent of each other and therefore a new industrial unit can claim deduction under both the sections on the gross total income independently. The AO also relied upon the decision of Hon'ble Gujarat High Court in the case of Isabgul Processing Co, -171 CTR 106 (252 ITR 777), but that decision is also not helpful to the assessee because this decision has been given in the context of claim u/s.80HH & 80J of the IT Act. The AO also relied upon the decision of Hon'ble Bombay High Court reported in the case of Nima Specific Family Trust 165 CTR 518 and Rajasthan High Court decision in the case of CIT vs. Choksi Contacts 166 CTR 383. Both the decisions have been given in the context of section 80HH & 80I and accordingly not applicable in the present case. The issue involved in this case has been covered by the decision of ITAT Spl. Bench, Chennai reported in 108 ITD 49. The relevant part of the decision is reproduced as under:- "With a view to provide suitable statutory safeguards for the I.T. Act 1961, and to prevent tax payers from taking undue advantage of existing provisions of the Act....
X X X X Extracts X X X X
X X X X Extracts X X X X
....entetia legis. There is no estopple against the statute. Circular No.772 dated 23rd December 1998 nowhere suggests that more than 100% deduction on the same profit can be granted to the assessee under various sections enumerated in Chapter VIA. The restrictive clause in section 80IA makes it abundantly clear that wherever deduction under any other section of Chapter VIA(C) is claimed, the computation will be subject to the restrictions laid down in section 80IA(9). It precludes protanto, all the deductions of such profits and gains claimed under Chapter VIA(C). Section 80HHC is part of Chapter VIA(C) and it is not a self-contained provision. There is absolutely no ambiguity of this aspect. Therefore, relief u/s.80IA should be deducted from the profits and gains of the business before computing relief u/s.80HHC." 6. ITAT SPL. Bench, Delhi in the case of ACIT vs. Hindustan Mint & Agro Products P. Ltd., reported in 119 ITD 107 has also held that "in view of the provisions of section 80IA(9) deduction u/s.80HHC is to be allowed on profits and gains as reduced by the deduction claimed and allowed u/s.80IB/80IA" The above SPL Bench decision has been affirmed by the Delhi High Court in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ials available on record. In the instant case, the assessment was originally completed u/s. 143(3) of the Act on 28.10.2005 wherein the assessee was allowed deduction u/s. 80IB at Rs 32,77,522/- and section 80HHC at Rs 53,82,417/-. While allowing deduction u/s. 80HHC, the Assessing Officer has not reduced the amount which was allowed as deduction u/s. 80IA from the 'profits and gains of business or profession'. Thereafter, the Assessing Officer initiated proceedings u/s. 147 of the Act and the assessee objected against the initiation of reassessment proceedings and submitted that deduction u/s. 80IB and 80HHC allowed in the original assessment were within the parameters of law and relied upon the decisions of Hon'ble Supreme Court in the case of JCIT Vs. Mandideep Engineering & Packaging (P) Ltd. (2007) 292 ITR 1, the decision of Hon'ble Gujarat High Court in the case of CIT Vs. Sidhpur Isabgul Processing Co. (2001) 171 CTR 206, the decision of Hon'ble Bombay High Court in the case of CIT Vs Nima Specific Family Trust (2001) 165 CTR 518 and the decision of Hon'ble Rajasthan High Court in the case of CIT Vs. Chokshi Contacts (P) Ltd. (2001) 166 CTR 383. 6. Considering the submissio....