C I T JODHPUR vs. MALBOROUGH POLYCHEM P LTD

1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR J U D G M E N T INCOME TAX APPEAL No. 116 of 2006 C I T JODHPUR V/S MALBOROUGH POLYCHEM (P) LTD Date of Judgment : 25.9.2008 PRESENT HON'BLE SHRI N P GUPTA,J. HON'BLE SHRI KISHAN SWAROOP CHAUDHARI,J. Mr.K.K.Bissa, for the appellant. Mr.Sanjeev Johari, for the respondent. BY THE COURT : (PER HON'BLE GUPTA,J.) This appeal of the Revenue has been admitted vide order dated 6.11.2006 by framing the following substantial question of law:- “Whether the assessee is entitled to claim deduction under Section 80Hh as well as under Section 80I both in respect of the industrial unit run by it?” The perusal of the judgment of the learned Tribunal, so far as it relates to this question, shows that the learned Tribunal has decided the appeal by relying upon judgment of this Court in C.I.T. Vs. Chokshi Contacts (P)

2 Ltd., reported in (2001) 166 CTR (Raj.) 383, equivalent to 251 ITR 587, and has also relied upon the judgment to the same effect of Madhya Pradesh High Court in I.T.A.No.92/99, S.L.P. against which has been dismissed by Hon'ble the Supreme Court. We have gone through the judgment in Chokshi Contacts' Case, and find that, that judgment does fully cover the controversy involved in the present case against the Revenue as decided by the Tribunal. Learned counsel for the appellant tried to make out a distinction, to the effect, that since in the present case, assessee factory came into production only after 1.4.90, deduction under Section 80HH could not be claimed. It would suffice to say, that the learned Commissioner in para 3.2 has clearly found, that the assessee has been manufacturing quick lime w.e.f. 1.8.89 i.e. before 1.4.90, to which effect, the assessee was given certificate by District Industries Department, Jodhpur. The production of hydrated lime was started after 1.4.90, but it was found by the Commissioner, that it does not make any difference with regard to entitlement of deduction under Section 80HH, because the assessee has started production of quick lime before 1.4.90. In the appeal before the Tribunal, this aspect about availability of deduction under Section 80HH has been decided by the learned Tribunal, on the ground,

3 that such deduction was never denied to the assessee in the earlier assessment years, so much so, that in immediately preceding year, being 1996-97, despite the fact that the assessment was made under Section 143(3), the deduction was allowed. In that view of the matter, it was found that the principle of consistency requires, that the view taken by the department in the preceding years should not be disturbed, unless there is a change in the factual and legal position. In our view, the reasonings given by the learned Tribunal are correct, and sound, and the assessee cannot be denied the benefit of Section 80HH, which is being given by the department all through. Therefore, the contention of the learned counsel for the appellant about non- availability of benefit of Section 80HH cannot be accepted. Thus, since the controversy is covered by the judgment of this Court in Chokshi Contacts' case above, against the Revenue, the question as framed is answered accordingly against the Revenue. The appeal is, therefore, dismissed. (KISHAN SWAROOP CHAUDHARI),J. (N.P.GUPTA),J. /tarun/