COMMISSIONER OF INCOME TAX DEL vs. ELTEK SGS P.LTD.

Whether Reporters of Local newspapers may be allowed to see the Judgment? 2. To be referred to the Reporter or not? 3. Whether the Judgment should be reported in the Digest?

In this appeal filed by the Revenue against the order dated 30th June, 2006 passed by Income Tax Appellate Tribunal, the following question of law was framed for consideration:- “Whether the Income Tax Appellate Tribunal was correct in law in holding that the “business profits” as per Explanation (baa) of Section 80 HHC of the Income Tax Act, 1961 was to include the amount of deduction allowable under Section 80 IB of the Act for the purpose of computing deduction under Section 80 HHC of the Act.”

The aforesaid question of law arose for consideration in the light of the following factual facts:- 2010:DHC:3343-DB

Further, some subsequent events which have taken place have rendered the aforesaid question redundant. Whether the assessee was entitled to deduction under Section 80 IB of the Act at all or not in respect of the said duty drawback was also bone of contention. Though, the assessee had succeeded till the stage of High Court holding in his favour namely the assessee was entitled to deduction under Section 80 IB of the Act in respect of duty drawback, the Supreme Court in appeal filed by the Revenue set aside the judgment of this Court relying upon its earlier judgment reported in 317 ITR 218. Copy of the Supreme Court order passed in the case of assessee is produced before us, relevant portion whereof reads as under:- 2010:DHC:3343-DB

Mr. Kapur, learned counsel appearing for the respondent makes statement at the Bar that under Section 80 IB of the Act the deduction was claimed only in respect of duty drawback and, therefore, the consequences of the aforesaid judgment is that no deduction is allowed to the assessee under Section 80 IB of the Act. In that view of the matter, the question of deduction of the amount allowed under Section 80 IB of the Act for the propose of computing deduction under Section 80 HHC of the Act does not arise at all. It goes without saying that deduction computed under Section 80 HHC of the Act has to be without any other deduction and, therefore, the effect of computation as per the order passed by the Tribunal, (without commenting upon as to whether the legal issue decided by the High Court was right or wrong) is correct and deduction has to be allowed taking into account the gross total income.

This appeal stands disposed of accordingly.