ASSTT. CIT vs. MOTI POLYMERS PVT. LTD.

Facts

The appeal was filed by the Assistant Commissioner (Revenue) against an order of the Income Tax Appellate Tribunal, Ahmedabad, dated 02.08.1999, concerning Assessment Year 1991-92. The appeal, filed in 1999, was not moved for over a decade and was subsequently restored on file on 07.03.2011 after being dismissed for default. A cognate appeal, Tax Appeal No. 588/1999, arising from the same Tribunal order, was decided by the High Court on 16.06.2011. The present appeal is governed by the decision in the cognate appeal.

Held

The High Court held that the Appellate Tribunal was right in law and on facts in directing to allow separate relief under sections 80HH and 80I of the Income Tax Act, 1961. The reasoning was based on the Supreme Court's dismissal of special leave petitions against decisions that allowed independent claims for deductions under both sections. The Court also referred to the Gujarat High Court's decision in CIT v. Amod Stamping, which supported the view that profits for 80I deduction are not reduced by 80HH deduction. Since the revenue's counsel could not dispute this position, the question of law was answered in the affirmative, in favour of the assessee and against the revenue. The appeal was accordingly dismissed. The operative direction was to allow separate relief under sections 80HH and 80I.

Key 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 Income Tax Act, 1961? (Question of law and fact) Assessee's contentions: The assessee argued that the controversy was concluded in its favour by the Supreme Court decision in Joint Commissioner of Income Tax Vs. Mandideep Engineering And Packaging. Ind. P. Ltd. (2007) 292 ITR 1 (S.C.). This decision noted that the Supreme Court had dismissed special leave petitions against Madhya Pradesh High Court decisions in J.P. Tobacco Products P. Ltd. Vs. C.I.T. and CIT v. Alpine Solvex P. Ltd., which held that deductions under sections 80HH and 80I could be claimed independently on gross total income. The assessee also relied on the Gujarat High Court's decision in CIT v. Amod Stamping, (2005) 274 ITR 176 (Guj), which held that profits for 80I deduction are not required to be reduced by 80HH deduction. Revenue's contentions: The learned Senior Advocate for the appellant (revenue) was not able to dispute the position of law as argued by the assessee.