A.C.I.T. vs. K.KHODIDAS PATEL SPECIFIC FAM-ILY TRUST

TAXAP/329/2000HC GujaratGJHC24022849200004 September 2012Author: HONOURABLE MR. JUSTICE AKIL KURESHI,HONOURABLE MS. JUSTICE HARSHA DEVANI3 pages
AI SummaryDismissed

What were the facts?

The Revenue (appellant) is challenging an order dated September 10, 1999, passed by the Income Tax Appellate Tribunal (ITAT) for the assessment year 1987-88. The assessee claimed deductions under Section 80IA and Section 80HH of the Income Tax Act, 1961. The Assessing Officer allowed Section 80IA deduction at 20% on the balance profit after deducting the relief allowable under Section 80HH. The Commissioner (Appeals) held that the disallowance was unjustified, stating that deductions under Section 80HH and Section 80-I are independent. The ITAT upheld this view, leading to the present appeal by the Revenue.

What did the High Court hold?

The Tribunal was right in directing to allow separate relief under Sections 80HH and 80I of the Act. The Gujarat High Court, in the case of Commissioner of Income-Tax vs. Amod Stamping (supra), had held that when computing profits for Section 80-I deduction, the profits and gains of the business are not required to be reduced by the deduction admissible under Section 80HH. This precedent directly addressed the issue raised by the Revenue. Since the Revenue's counsel could not dispute this position, the High Court answered the substantial question of law in the affirmative, in favour of the assessee. The appeal was accordingly dismissed.

What were the issues?

1. Whether the appellate tribunal is right in law and on facts in directing to allow separate relief under sections 80HH and 80I of the Act, without considering the provisions of sub-section (9) of section 80HH of the Act? Assessee's contention: The assessee argued that the controversy is concluded in its favour by the Gujarat High Court's decision in Commissioner of Income-Tax vs. Amod Stamping (2005) 274 ITR 176. Revenue's contention: The Revenue, represented by its senior counsel, was not able to dispute the position taken by the assessee based on the cited precedent.

Which sections of the Income-tax Act were involved?

Section 80IA,Section 80HH,Section 80-I

AI-generated summary — verify with the full judgment below

TAXAP/329/2000 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No.329 of 2000 For Approval and Signature: HONOURABLE MR. JUSTICE AKIL KURESHI HONOURABLE MS. JUSTICE HARSHA DEVANI ========================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment? 2 To be referred to the Reporter or not? 3 Whether their Lordships wish to see the fair copy of the judgment? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder? 5 Whether it is to be circulated to the civil judge? ========================================= A.C.I.T. - Appellant(s) Versus K. KHODIDAS PATEL SPECIFIC FAMILY TRUST - Opponent(s) ========================================= Appearance: MR MR BHATT, SR. COUNSEL with MRS MAUNA M BHATT for Appellant(s): 1, MR BANDISH SOPARKAR for MR SN SOPARKAR for Opponent(s): 1, ========================================= CORAM : HONOURABLE MR. JUSTICE AKIL KURESHI and HONOURABLE MS. JUSTICE HARSHA DEVANI Date : 04/09/2012 ORAL JUDGMENT (Per : HONOURABLE MS. JUSTICE HARSHA DEVANI)

TAXAP/329/2000 2/3 JU

The order continues below.

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