2008 (8) TMI 202

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....ubstantial question of law: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in allowing deduction under section 80J and investment allowance of the current year before allowing depreciation of the current year?" 2. A perusal of the order passed by the learned Commissioner of Income- tax (Appeals), Jalandhar (for short, "the CIT(A)") shows that the issue involved in the present case, in fact, is as to whether the Assessing Officer had erred in law in allowing reference under section 80J of the Income-tax , 1961 (for short, "the Act") before allowing of difference. However, subsequently it was recorded as relief under section 80J and investment allowance of the current year before all....

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....rant of all other deductions under the Act except provided under Chapter VI-A of the Act of which section 80J is a part. 5. On the other hand, learned counsel for the assessee submitted that the Tribunal in the present case had followed its earlier decision in the case of Mahavir Spinning Mills Ltd. and the Revenue having not disclosed the status of the case should not be heard on the merits in the present case as well. He further submitted that the view expressed by the Tribunal in the present case is strictly in conformity with law. Section 80J of the Act provides that deduction has to be calculated on the gross total income. 6. Before we express our opinion on the question, referred to above, it would be appropriate to refer to the....

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....nder section 80HH of the Act is admissible from the net income and not gross income. 10. The Bombay High Court in Grasim Industries Ltd. v. Asst. CIT [2000] 245 ITR 677, while holding section 80AB of the Act, inserted with effect from April 1, 1981, by the Finance (No. 2) Act, 1980, to be declaratory in nature, held that the deduction under section 80HH of the Act was admissible only after deductions are given under sections 30 to 43A of the Act. 11. In CIT v. Cadila Chemicals Pvt. Ltd. [2003] 259 ITR 692, the Gujarat High Court while considering the issue as to whether the relief under section 80HH of the Act is to be worked out without deducting depreciation from the profits of the company, opined that keeping in view the provisions....