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Judgment
K. Raviraja Pandian, J.—The Revenue has filed this appeal against the order of the Income Tax Appellate Tribunal made in ITA. No.
1265/Mds/1993, dated 12.3.2001. The relevant assessment year is 1991-1992.
The facts as culled out from the statement go as follows:
We heard the argument of the learned Counsel for the Revenue and the learned Counsel for the assessee and perused the materials available on
record.
The assessee is a closely held company and had filed a return on 27.12.1991 declaring taxable income of Rs. 27,79,910/-. Intimation u/s 143 was
given on 13.1.1992 and the same was rectified u/s 154 of the Income Tax Act on 17.3.1992. Aggrieved by the rectification, the assessee filed an
appeal and the same was dismissed by the Commissioner of Income Tax (Appeals) vide order dated 9.7.1992. The assessee claimed deduction
u/s 80HH at 20% and 80-I at 25% of the income returned. The Assessing Officer passed orders granting relief u/s 80I on the gross total income
as reduced by deduction u/s 80HH on the view that as per Section 80HH(9) first deduction u/s 80HH was to be given and the balance amount
only qualified for deduction u/s 80I. On appeal, the Commissioner of Income Tax reversed the finding of the Assessing Officer and directed him to
quantify the admissible relief u/s 80I without adjusting the deduction allowed u/s 80HH. The revenue carried the matter on appeal to the Income
Tax Appellate Tribunal, which confirmed the orders of the Commissioner of Income Tax (Appeals). The correctness of the order is now
canvassed in this appeal by the revenue.
At the time of admission, the appeal was admitted on the following substantial questions of law:
i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the order of the CIT(A) that the amount of
deduction allowed u/s 80HH is to be reduced from the total income while calculating the admissible deductions u/s 80I of the Income Tax Act?
ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in allowing the deduction u/s 80I without reducing the
deduction allowed u/s 80HH?
It is submitted across the bar by the learned Counsel appearing for either side that the very issue has been considered and held against the
revenue by the Madhya Pradesh High Court in the case of J.P. Tobacco Products Pvt. Ltd. Vs. Commissioner of Income Tax, . It has also been
further submitted that the Bombay High Court also has taken the same view in the case of The Commissioner of Income Tax Vs. NIMA Specific
Family Trust, . The judgment of the Madhya Pradesh High Court has been taken to the Supreme Court and the Supreme Court in (2007) 107 ITD
327 , has rejected the S.L.P., by giving the following reasons:
...2. 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 80I on the gross total income. Against this
judgment, a SLP was filed in this Court which was dismissed on the ground of delay on July 21, 2000 (see (2000) 245 ITR 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. SLP against this was dismissed by this curt on January 12, 2001, (see Federation of
Andhra Pradesh Chambers of Commerce and Industry and Others Vs. State of Andhra Pradesh and Others, . 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.
In view of the decision of the Supreme Court referred to supra, the above tax case appeal is dismissed. No costs.