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2005 (9) TMI 274 - AT - Income TaxDeduction claim u/s 80HH and 80-I both or not - Backward Area - In respect of manufacturer of power generation - employment of the requisite number of employees - HELD THAT:- We find that section 80HH was primarily enacted to promote industrial undertaking in backward areas. The benefit of the section is available on the: manufacturing and production of article. This section was effective from 31-12-1970 to 31-3-1990. Thereafter section 80-I was made operative from 1-4-1990 to 1-4-1991. Thereafter section 80-IA was introduced by the Finance (No. 2) Act, 1991 with effect from 1-4-1991. In this section Legislature included generation of power or transmission or distribution of power also. If generation of power could be placed within the ambit of the term "article", there was no necessity of specifying separately the same in the section. This clearly manifest the intent of the Legislature that the word "article" used in section 80HH(2) does not include within its ambit power generation. Regarding the requisite number of employees, we find that Assessing Officer has given a categorical finding in the order that the assessee was entrusted the management of looking after the wind mills to its associate-company, Pandian Chemicals. Assessee did not directly employ the requisite number of workers. In fact, the assessee did not employ any worker. The assessee only shared the cost of employees with Pandian Chemicals and another concern, Metal Powder Co. Ltd. As such it is abundantly clear that the assessee did not satisfy the condition as regards the requisite number of workers. Coming now to the last issue we find that law is clear. The Hon'ble Supreme Court has laid down in the case of Motilal Persticides (I.) (P.) Ltd. v. CIT[2000 (2) TMI 9 - SUPREME COURT] that special deduction is to be allowed only on net income and not on gross income. Adverting to the objection of the learned counsel for the assessee that deduction was allowed in the initial year of assessment, therefore, it cannot be withdrawn in later year, we find that there is no merit in this contention. The claim is not maintainable under the law. As a general rule, the principle of res judicata is not applicable to decisions of income-lax authorities. An assessment for a particular year is final and conclusive between the parties only in relation to that year. Decisions given in an assessment order for an earlier year are not binding either on the assessee or on the department in a subsequent year. The assessment and the facts found are conclusive only in the year of assessment; the findings on question of fact may be good and cogent evidence in subsequent year, when the same question falls to be determined in another year, but they are not binding and conclusive. We, therefore, decide this issue in favour of the revenue and against the assessee. In the result, appeal of the assessee stands dismissed.
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