The Commissioner of Income Tax-I vs MRF Limited

K. Raviraja Pandian, J.—The revenue is on appeal against the order of the Income Tax Appellate Tribunal, Madras D Bench, Chennai dated 11.2.2009 passed in ITA. No. 716/Mds/2008 relating to the assessment year 2004-05.

The Statement of facts culled out from the memorandum of grounds are as follows:

The assessee company is engaged in the business of manufacture and sale of automobile tyres, tubes, flaps and other rubber products, paints and trading in sports goods, machinery and spares. For the assessment year 2004-05, the assessee company filed its return of income on 29.10.2004 declaring an income of Rs. 65,98,11,813/-. While computing the asessment, the Assessing Officer invoked the provisions of Section 80IA(9) and deducted the quantum of claim u/s 80IB from the business profit while computing the deduction u/s 80HHC. Aggrieved by the order of the assessment, the assessee carried the matter on appeal. The Commissioner of Appeals by following the Tribunal''s order in the case of (2007) 108 ITD 49 confirmed the order of assessment. The assessee carried the matter on further appeal to the Tribunal. The Tribunal following the Division Bench judgment of this Court in the case of SCM Creations Vs. Assistant Commissioner of Income Tax, allowed the appeal of the assessee. The correctness of the same is now put in issue in this appeal by formulating the following substantial questions of law:

Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that while computing the deduction u/s 80HHC, the deduction allowed u/s 80IB need not be reduced from the business profits?

As stated already in the summation of facts, the Tribunal has followed the judgment rendered by the Division Bench of this Court in the case of SCM Creations Vs. Assistant Commissioner of Income Tax, in which one of us (K. Raviraja Pandian, J.) is a party. In the said decision, the question of law has already been decided against the Revenue by observing as follows:

The Counsel on either side submits that the issue has to be decided in favour of the assessee, as this Court already, by following the decision of (2007) 107 ITD 327 has decided the issue in favour of the assessee in T.C.No.344 of 2004, (since reported as Deputy CIT v. Chola Textiles P. Ltd. [2008] 304 ITR 256 (Mad) wherein this Court has held as follows:

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 (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. SLP against this was dismissed by this curt 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 CIT v. Nima Specific Family Trust reported in 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.

Following the same, the appeals are allowed to the extent indicated above.

By following the very same Judgment, the present tax case appeal is also dismissed. No costs.