COMMISSIONER OF INCOME TAX vs. AUSTIN ENGINEERING CO. LTD.

TAXAP/1216/2005HC GujaratGJHC24034611200526 November 2014Author: HONOURABLE MR. JUSTICE KS JHAVERI,HONOURABLE MR. JUSTICE K.J.THAKER5 pages
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Facts

The assessee, Austin Engineering Co. Ltd., filed its income tax return for Assessment Year (AY) 1994-95 on 29.11.1994, declaring a total income of Rs. 29,57,820/-. The return was processed under Section 143(1) with an adjustment for previous year expenses. The Assessing Officer granted deduction under Section 80I after reducing the deduction under Section 80HH. The assessee appealed to the CIT(A), who partly allowed the appeal. The Revenue then appealed to the Income Tax Appellate Tribunal (ITAT). The ITAT, by its common judgment and order dated 16.03.2005, dismissed the Revenue's appeal for AY 1994-95 and partly allowed it for AY 1997-98. The Revenue has filed these appeals against the ITAT's order.

Held

The High Court held that Sections 80HH and 80-I of the Income Tax Act, 1961, are independent provisions. Therefore, deductions can be claimed by a newly established industrial undertaking under both Section 80HH and Section 80I on the gross total income. The Court relied on the decision of the Apex Court in the case of Joint Commissioner of Income-Tax v. Mandideep Eng. And Pkg. Ind. P. Ltd., [2007] 292 ITR 01 (SC). Since the issue was concluded by the Apex Court's decision, the Court answered the substantial question of law in favour of the assessee and against the Revenue. The appeals were disposed of accordingly, implying the ITAT's order was upheld in favour of the assessee on this point.

Key Issues

1. Whether deduction under Section 80-I of the Income Tax Act, 1961, has to be granted after deducting the benefit/deduction granted under Section 80HH of the Income Tax Act, 1961, from the business income? Assessee's Contention: The judgment does not record specific contentions for the assessee, but implies they argued for claiming deductions under both Section 80HH and Section 80I independently. Revenue's Contention: The Revenue argued that the deduction under Section 80I should be calculated after reducing the amount of deduction granted under Section 80HH from the business income. The Revenue's counsel was not in a position to dispute the proposition of law as laid down by the Apex Court.

Sections Cited

Section 260A, Section 80I, Section 80HH, Section 143(1)

AI-generated summary — verify with the full judgment below

O/TAXAP/1216/2005 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 1216 of 2005 With TAX APPEAL NO. 1217 of 2005

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE KS JHAVERI

and HONOURABLE MR.JUSTICE K.J.THAKER

================================================================ 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 ? ================================================================ COMMISSIONER OF INCOME TAX....Appellant(s) Versus AUSTIN ENGINEERING CO. LTD.....Opponent(s) ================================================================ Appearance: MR PRANAV G DESAI, ADVOCATE for the Appellant(s) No. 1 MR BS SOPARKAR FOR MRS SWATI SOPARKAR, ADVOCATE for the Opponent(s) No. 1 =====================================

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