TaxTMI 
TaxTMI 
2026 (9) TMI 1330
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.... the Appellant. (ii) In the meanwhile, the operation of order of Tribunal dated 24.08.2007 (Annexure-6) be kindly stayed or; (iii) Any other interim relief, as may be deemed appropriate under the facts and circumstances of the case, be allowed to the appellant." 1.1. The record indicates that vide order dated 13.05.2008, the appeal was admitted on the following substantial questions of law: "(1) Whether the eligible amount of deduction under section 80IA/80IB of the Act should be reduced for computation of deduction under section 80HHC(3) of the Act? (2) Whether the 'actual cost' of an asset determined under section 43(1) of the Act which forms part of the Written Down Value within the meaning of section 43(6) of the Act can be modified in subsequent years when the same has already formed part of Written Down Value in preceding years and when there is no specific provision permitting the same?" 2. The relevant facts, in brief, are that the appellant-assessee is engaged in the business of manufacturing solid-state electronic energy meters at its units situated at Pratap Nagar Industrial Area, Udaipur, and at Bated and Barotiwala in District ....
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....ed Commissioner (Appeals) accepted the appellant's contention that deduction under Section 80HHC was required to be computed on the income included in the gross total income before making deductions under Chapter VI-A, subject to the aggregate deductions remaining within the statutorily permissible limit. 2.8. In relation to the amount of Rs. 7,77,607/-, the learned Commissioner (Appeals) found that the liability came to the knowledge of the appellant and crystallised on 31.03.2003. The disallowance was accordingly deleted. 2.9. The Revenue preferred ITA No.457/JU/2006 before the learned Income Tax Appellate Tribunal, Jodhpur Bench. The Revenue subsequently filed a revised Form No.36 and raised an additional ground questioning the allowance of deduction under Section 80HHC on the gross total income without reducing the amount of deduction under Sections 80-IA/80-IB. The learned Tribunal admitted the additional ground upon finding that it raised a legal question not requiring investigation into fresh facts. 2.10. By the impugned order dated 24.08.2007, the learned Tribunal partly allowed the Revenue's appeal. On the first issue, the learned Tribunal relied upon the decision....
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....t the written-down value could not subsequently be increased by adding the amount covered by the later invoice in the absence of a statutory provision authorising such adjustment. 3.4. It was further submitted that the learned Tribunal had treated the additional sales tax of Rs. 6,58,989/- and the interest of Rs. 1,18,618/- as a composite capital cost without separately examining their nature. The learned Tribunal had also not identified the particular assets, the relevant block, the applicable rate of depreciation or the statutory manner in which the amount was to be incorporated into the written-down value. 3.5. Learned counsel accordingly prayed that both substantial questions of law be answered in favour of the appellant and that the impugned order be set aside to the extent challenged. 4. Per contra, learned counsel for the respondent-Revenue supported the impugned order. It was submitted that Section 80-IA(9), read with Section 80-IB(13), was intended to prevent repeated deduction in respect of the same profits and that the appellant could not obtain deductions under Sections 80-IA/80-IB and Section 80HHC in excess of the profits of the eligible business. 4.1. Reg....
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....(Bom.), that the deductions under the respective provisions are to be computed in accordance with their own statutory formulae, but the aggregate deduction actually allowed cannot exceed the profits of the eligible business. 5.5. Applying the aforesaid principle, this Hon'ble Court finds that the learned Tribunal was not justified in holding that the amount of deduction allowed under Sections 80-IA/80-IB was required to be first subtracted from the profits of the business while computing the deduction under Section 80HHC(3). 5.6. The deduction under Section 80HHC was required to be computed independently in accordance with the formula prescribed under Section 80HHC(3) and the definition of "profits of the business" applicable thereto. After such computation, Section 80-IA(9), read with Section 80-IB(13), would operate at the stage of allowance so that the same profits are not subjected to repeated deduction and the aggregate deduction does not exceed the profits of the eligible business. 5.7. The first substantial question of law is, therefore, answered in the negative, in favour of the appellant-assessee and against the Revenue. The finding recorded by the learned Tribuna....
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....s required to be determined in accordance with the statutory mechanism under Section 43(6). 6.6. A subsequent liability cannot be inserted into the opening written-down value merely by describing it as part of the actual cost. The authority must identify the statutory basis for the adjustment and determine, upon examination of the relevant material, whether the subsequent amount truly constitutes an additional acquisition cost of the asset and whether the Act permits its incorporation into the written-down value in the year of crystallisation. 6.7. In the present case, the learned Tribunal neither identified such a statutory mechanism nor recorded the asset-wise and block-wise findings necessary for allowing depreciation. Its general direction that depreciation be allowed "as per law" does not cure the absence of the foundational determination. 6.8. This Hon'ble Court, therefore, finds that the learned Tribunal was not justified in conclusively directing that the entire amount of Rs. 7,77,607/- be treated as part of the actual cost and that depreciation be allowed thereon without examining the statutory manner in which the written-down value could be adjusted. 6.9. The ....