TaxTMI 
TaxTMI 
2016 (8) TMI 512
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....t - Department has challenged the order dated 22.06.2007 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench "A" in ITA No.3061/Ahd./2002 for the Assessment Year : 1994-1995. In all the above Appeals, the Tribunal dismissed the Appeals preferred by the Department and confirmed the order of CIT (Appeals). 3. While admitting Tax Appeals No.166/2008 to 169/2008 on 19.03.2008, the following common substantial question of law was framed by the Court for consideration :- "Whether the ITAT was right in law and on facts in confirming the order passed by the CIT (A) holding that the deduction u/s. 80HHC should be calculated without excluding the profit of new unit under Section 80IA of the IT Act?" 4. While admitting Tax Appeal No.170/2008 on 19.03.2008, the following substantial questions of law were framed by the Court for consideration :- "I. Whether the ITAT was right in law and on facts in confirming the order passed by the CIT(A) holding that the deduction u/s. 80HHC should be calculated without excluding the profit of new unit under Section 80IA of the IT Act? II. Whether on the facts and in the circumstances of the case, the Tribunal was right in law to exclu....
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....ns from certain industrial undertakings other than the business of infrastructure development. He had further submitted that section 80-IB(13) also provides that certain provisions of section 80-IA would also apply to section 80-IB, like the provisions of sub-section (5) and sub-sections (7) to (12) of section 80-IA. It is beyond cavil that the aforesaid legal position continued to exist up to March 31, 1999. With effect from April 1, 1999, amendments were made by inserting sub-section (9) to section 80-IA and sub-section (13) to section 80-IB. These provisions read as under : "80-IA. (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. 80-IB. (13) The provisions contained in sub-section (5) and sub-sections (7) to (12) of section-80IA shall, so ....
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....T. v. Hind. Mint and Agro Products reported in (2009) 315 ITR 401 (Delhi) (SB). The Tribunal went deep into the issues, and traced the background for introduction of sub- section (9) of section 80IA. It was noticed that in case of J.P. Tobacco Products Private Limited v. CIT reported in 229 ITR 123 Madhya Pradesh High Court considered the question, whether deduction under section 80I is to be allowed only on the balance of income after deducting the relief under section 80HH from the gross total income, and not from gross total income as defined under section 80B(5) of the Act. The question pertained to the assessment year 1984-85. It was held that the provision of law is clear. So far as the benefit of section 80I is concerned, it has to be granted on gross total income, and not on the income deducted under section 80HH. It was further held that section 80HH and section 80I of the Act are independent, and therefore, deductions can be claimed by newly established industrial undertakings both under section 80HH and 80I on the gross total income. The Revenue challenged the decision of theMadhya Pradesh High Court before the Supreme Court. The Supreme Court, however, noticed that such....
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....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 profit or gains of industrial undertaking, which has already been allowed as a deduction u/s 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 it is 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." 7.5. In addition, learned Senior Counsel Mr. Mihir Thakore has r....