2007 (1) TMI 115 - HC - Income Tax

Summary

Issues involved:
The judgment involves the assessment year 1992-93 and the relief u/s 80HHC. The questions raised include the treatment of unabsorbed depreciation and investment allowance, consideration under an agreement for sale of goods, computation of relief under the proviso to section 80HHC(3) in respect of incentives received, and the handling of appeals by the Tribunal and Commissioner.

Treatment of unabsorbed depreciation and investment allowance:
The assessing authority deducted unabsorbed depreciation and investment allowance from earlier years to calculate the relief u/s 80HHC. The assessee argued that these should not be set off against business profits for this purpose, claiming entitlement to relief u/s 80HHC(1A). The Tribunal, however, held that u/s 80AB, these should be deducted from business profits for determining the relief u/s 80HHC, affirming the lower authorities' orders.

Consideration under an agreement for sale of goods:
The Tribunal was asked to consider whether the entire amount receivable under an agreement for sale of goods should be treated as sale consideration for computing relief u/s 80HHC. The Tribunal's decision on this matter was not explicitly mentioned in the judgment.

Computation of relief under the proviso to section 80HHC(3) in respect of incentives received:
The Tribunal rejected the applicant's ground regarding the computation of relief under the proviso to section 80HHC(3) for incentives received, stating that the relief under section 80HHC was under appeal before them. The Tribunal's decision on this issue was not explicitly provided in the judgment.

Handling of appeals by the Tribunal and Commissioner:
The Tribunal's handling of the appeal, including remitting the matter back to the Commissioner or dismissing the appeal, was questioned. The Tribunal concluded that the Commissioner's order did not address the issue on appeal before him, leading to the dismissal of the applicant's appeal on this matter.

Conclusion:
The court rejected the applicant's contentions regarding the computation of relief u/s 80HHC, citing the Supreme Court's interpretation that section 80AB has an overriding effect in calculating deductions under Chapter VI-A. The court emphasized that section 80HHC deductions must align with the provisions of the Act, particularly section 80AB, and upheld the Tribunal's decision. The references were answered against the assessee, with no costs awarded.