The relief under Section 80-IA should not be deducted from profits and gains of business before computing relief under Section 80HHC
April, 05th 2008
IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM: THE HONOURABLE MR. JUSTICE K. RAVIRAJA PANDIAN AND THE HONOURABLE MRS. JUSTICE CHITRA VENKATARAMAN Tax Case (Appeal) Nos. 310 and 311 of 2008 and M.P. Nos. 2+2 of 2008
M/s. SCM Creations No. 57, VOC Nagar, South Valayankadu Tirupur-641604 Appellant in both the Tax Case Appeals Versus The Assistant Commissioner of Income Tax, Circle-I, Tirupur Respondent in both the Tax Case Appeals
Tax Case Appeals filled against the orders of the Income Tax Appellate Tribunal, Bench D, Chennai, dated 6.7.2007 in ITA. Nos. 933/Mds/2006 and 934/Mds/2006 against the order of the IT Appeal No. 289/C/05-06 dated 30.1.2006 and IT Appeal No. 259-C/05-06 dated 30.1.2006 on the file of the Commissioner of Income Tax (Appeals)-IT, Coimbatore and against the order of the PAN/STR.NO.S.349/AALFS64888 dated 13.9.2005 and dated 31.8.2005 respectively on the file of the Assistant Commissioner of Income Tax Circle I, Tirupur.
For Appellant: Mr. A. Thiagarajan, Senior Counsel for Mr. S. Ramesh Kumar For Respondent: Mr. N. Muralikumaran, Senior Standing Counsel
The relief under Section 80-IA should not be deducted from profits and gains of business before computing relief under Section 80HHC.
JUDGMENT K. Raviraja Pandian, J
The two appeals are filed by the assessee relating to the assessment years 2002-2003 and 2003-2004.
2. The assessee is a partnership firm engaged in the business of manufacture and export of hosiery garments.
3. The issue involved in these two appeals are whether the relief under Section 80-IA should be deducted from profits and gains of business before computing relief under Section 80HHC.
4. The counsel of either side submits that the issue has to be decided in favour of the assessee, as this Court already, by following the decision of 282 ITR 389 (CIT Vs V. Chinnapandi), has decided the issue in favour of the assessee in T.C. No. 344 of 2004, wherein this Court has held as follows: -
5. It is submitted across the bar by the learned counsel appearing for either side that the very issue has been considered and held against the revenue by the Madhya Pradesh High Court in the case of J.P. Tobacco Products P. Ltd. Vs Commissioner of Income Tax reported in (1998) 229 ITR 123. It has also been further submitted that the Bombay High Court also has taken the same view in the case of Commissioner of Income-Tax Vs. Nima Specific Family Trust reported in (2001) 248 ITR 29. The judgment of the Madhya Pradesh High Court has been taken to the Supreme Court and the Supreme Court in Joint Commissioner of Income-Tax Vs. Mandideep Engineering and Packaging Industries P. Ltd., (2007) 292 ITR 1, has rejected the SLP, by giving the following reason:
2. The Madhya Pradesh High Court in J.P. Tobacco Products P. Ltd. Vs. CIT reported in (1998) 229 ITR 123 look the view that both the sections are independent and, therefore, the deductions could be claimed both under sections 80HH and 80-I on the gross total income. Against this judgment, a special leave petition was filed in this Court which was dismissed on the ground of delay on July 21, 2000 (see (2000) 245 ITR (St.) 71). The decision in J.P. Tobacco Products P. Ltd. (1998) 229 ITR 123 (MP) was followed by the same High Court in the case of CIT Vs. Alpine Solvex P. Ltd. in ITA No. 92 of 1999 decided on May 2, 2000. Special leave petition against this was dismissed by this curt on January 12, 2001, (see (2001) 247 ITR (St.) 36). This view has been followed repeatedly by different High Courts in a number of cases against which no special leave petitions were filed meaning thereby that the Department has accepted the view taken in these judgments. See CIT Vs. Nima Specific Family Trust reported in (2001) 248 ITR 29 (Bom); CIT Vs. Chokshi Contacts P. Ltd. (2001) 251 ITR 587 (Raj); CIT Vs Amod Stamping (2005) 274 ITR 176 (Guj.); CIT Vs Mittal Appliances P. Ltd. (2004) 270 ITR 65 (MP); CIT Vs Rochiram and sons (2004) 271 ITR 444 (Raj); CIT Vs. Prakash Chandra Sasant Kumar (2005) 276 ITR 664 (MP); CIT Vs. SKG Engineering P. Ltd. (2005) 119 DLT 673 = (2006) 285 ITR 423 (Delhi) and CIT Vs. Lucky Laboratories Ltd. (2006) 200 CTR 305 (All).
Since the special leave petitions filed against the judgment of the Madhya Pradesh High Court have dismissed and the Department has not filed the special leave petitions against the judgments of different High Court following the view taken by the Madhya Pradesh High Court, we do not find any merit in this appeal. The Department having accepted the view taken in those judgments cannot be permitted to take a contrary view in the present case involving the same point. Accordingly, the civil appeal is dismissed. No costs.
5. Following the same, the appeals are allowed to the extent indicated above. Consequently, connected miscellaneous petitions are closed. No costs.