TaxTMI 
TaxTMI 
2014 (9) TMI 98
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....ubstantial question of law : 1. Whether deduction under Section 80-I(IA) is to be computed on the gross total income derived from business of Industrial undertaking without deducting the amount of deduction under Section 80HHC or? 2. Whether the Assessing Officer while examining the return submitted by the assessee, is liable to or empower to grant correct amount of deduction to the assessee to which she is entitled to in law even if by omission or otherwise it has not been so claimed in the return income, submitted by her? The brief facts of the case are that during the assessment year under consideration, the assessee has derived income from industrial activities being mining and was also engaged in export business. The assessee also d....
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....assessee. The Tribunal has restored the order passed by the A.O. Being aggrieved, the assessee has filed the present appeal. With this background, heard Shri S.D. Singh, the learned Senior Counsel assisted by Shri Krishna Dev Vyas, the learned counsel for the assessee, who has justified the order passed by the First Appellate Authority. He read out the then Section 80A of the Act which on reproduction reads as under :- "80A (1) In computing the total income of an assessee, there shall be allowed from his gross total income, in accordance with and subject to the provisions of this Chapter, the deductions specified in sections 80C to [80U]. (2) The aggregate amount of the deductions under this Chapter shall not, in any case exceed the gros....
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....as argued that Chapter VIA is independent code in itself. The deductions under this chapter are to be allowed as per different provisions mentioned in the chapter itself. Section 80-IA speaks of allowance of deduction in respect of income derived from industrial undertaking. It does not say that the same shall be allowed after reducing deductions under other provisions of this chapter. For the purpose, he relied on the ratio laid down in the following cases :- (a) CIT Vs. Lucky Laboratories Ltd. [2006] 284 ITR 435 (All) In this case it was observed that the deduction under Section 80HH cannot be excluded while calculating special deduction under Section 80-I Income Tax Act, 1961, sub Section 80HH and 80-I. (b) CIT Vs. Hindustan Pipe Udyo....
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....essee is claiming the benefit of deduction of particular amount of profits and gains under section 80-IA to that extent profits and gains are to be reduced while calculating the deduction under heading C of Chapter VI-A of the Act. Further the word "and" is disjunctive which would mean that the other provision is independent of the first one namely, that the total deductions should not exceed the profits and gains in a particular year. It would, therefore, be clear that this provision aims at achieving two independent objectives. It cannot be limited to the second objective alone thereby nullifying the first altogether and making it otiose. For the purpose of computing deduction under section 80HHC of the Act, deduction already allowed unde....
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....tioned that the Hon'ble Supreme Court in the case of IPCA Laboratory Ltd. Vs. Deputy Commissioner of Income Tax [2004] ITR (Vol 266) 521 has observed that : "......undoubtedly section 80HHC has been incorporated in the Income Tax Act, 1961, with a view to providing incentive for earning foregin exchange. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of the section. It the wording of the section is clear, then benefits which are not available cannot be conferred by ignoring or misinterpreting the words in the section. A plain reading of Section 80HHC makes it clear that in arriving at profits earned from export of both self manufactured goods and trading goods, ....
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....r is only for the purpose of enabling the export house to pass on the deduction which it would have got to the supporting manufacturer. If no deduction is available to the extent house because there is a loss, then the export house cannot pass on or give credit of such non-existing deduction to a supporting manufacturer. Section 80AB has been given an overriding effect over all other sections, in Chapter VI-A. Section 80HHC does not provide that its provisions are to prevail over section 80AB or over any other provision of the Act. Circular No. 636 dated 31st August, 1992 of the Central Board nowhere provides for negative profits. It also shows that only positive profits can be considered for purposes of deduction under Section 80HHC. Th....