Commissioner of Income Tax vs Vijay Solvex Ltd.

This Income Tax Appeal, preferred by the Commissioner of Income Tax, Alwar against the order of the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur dated 07.09.2005, was admitted on the substantial question of law, as follows:-

"Whether the findings of the Tribunal are perverse in upholding the order of the CIT(A) in allowing the deduction under Section 80I on gross total income before reducing deduction under Section 80HH?" 2. The question of law has since been decided by Hon''ble Supreme Court in Joint Commissioner of Income Tax Vs. Madideep Engg. and Pkg. India (P.) Ltd., . The Supreme Court in its short judgment dated 12.04.2006, held as follows:-

"1. The point involved in the present case is whether sections 80HH and 80-I of the Income-tax Act, 1961, are independent of each other and therefore a new industrial unit can claim deductions under both the sections on the gross total income independently or that deduction under section 80-I can be taken on the reduced balance after taking into account the benefit taken under section 80HH.

The Madhya Pradesh High Court in J.P. Tobacco Products Pvt. Ltd. Vs. Commissioner of Income Tax, took the view that both the sections are independent and, therefore, the deductions could be claimed both under sections 80HH and 80-I on the gross total income. Against this judgment a special leave petition was filed in this court which was dismissed on the ground of delay on July 21, 2000 (see [2000] 245 ITR (St.) 71). The decision in J.P. Tobacco Products Pvt. Ltd. Vs. Commissioner of Income Tax, was followed by the same High Court in the case of CIT v. Alpine Solvex P. Ltd. in I.T.A. No. 92 of 1999 decided on May 2, 2000. Special leave petition against this decision was dismissed by this court on January 12, 2001, (see [2001] 247 ITR (St.) 36). This view has been followed repeatedly by different High Courts in a number of cases against which no special leave petitions were filed meaning thereby that the Department has accepted the view taken in these judgments. See The Commissioner of Income Tax Vs. NIMA Specific Family Trust, ; Commissioner of Income Tax, Jodhpur Vs. M/s. Chokshi Contacts (P) Ltd. Udaipur, ; Commissioner of Income Tax Vs. Amod Stamping, ; Commissioner of Income Tax Vs. Mittal Appliances and Others, ; Commissioner of Income Tax Vs. Rochi Ram and Sons, ; Commissioner of Income Tax Vs. Prakash Chandra Basant Kumar, Commissioner of Income Tax Vs. S.B. Oil Industries Pvt. Ltd., ; The Commissioner of the Income Tax-III Vs. S.K.G. Engineering Pvt. Ltd., and The Commissioner of Income Tax Vs. Lucky Laboratories Ltd., .

Since the special leave petitions filed against the judgment of the Madhya Pradesh High Court have been dismissed and the Department has not filed the special leave petitions against the judgments of different High Courts following the view taken by the Madhya Pradesh High Court, we do not find any merit in this appeal. The Department having accepted the view taken in those judgments cannot be permitted to take a contrary view in the present case involving the same point. Accordingly, the civil appeal is dismissed. No costs."

The question is thus, found to be covered by the aforesaid judgment of the Supreme Court, and is accordingly decided in favour of the assessee and against the Department.

This Income Tax Appeal is accordingly dismissed.