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TMI Blog2014 (1) TMI 1587X X X X Extracts X X X X X X X X Extracts X X X X ..... 80HHC and 80IB of the Act. The deduction under Section 80HHC of the Act was allowed at Rs.1,48,94,112/- without reducing therefrom the deduction allowed under Section 80IB at Rs.47,35,855/-. The Commissioner of Income Tax, Jalandhar-1, Jalandhar (for short, the CIT) invoking the provisions of Section 263 of the Act issued notices dated 20.3.2008 and 25.3.2008 (Annexure A-5). Vide order dated 28.3.2008 (Annexure A-2), disagreeing with the stand taken in reply dated 27.3.2008 (Annexure A-4) by the assessee, the CIT directed the AO to recompute the total income of the assessee keeping in view the provisions of Section 80IB(13) read with Section 80IA(9) of the Act. Aggrieved with this order, the assessee had approached the Tribunal where orders of the CIT were affirmed and appeals of the assessee, consequently, were dismissed. 4. In the present appeal, following substantial questions of law had been put forth for answer by the appellant/assessee: (i) "That the ITAT was not justified on facts & in law in confirming the action of C.I.T. u/s 263 in holding the findings of the AO as erroneous in so far it is prejudicial to the interests of revenue and thereby s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Madras High Court has dealt with the provisions of Section 80IA which does include 80IA(9), so that the holdings of the ITAT while confirming the orders u/s 263 by the CIT is erroneous and needs interference by this Hon'ble Court. (v) That the ITAT has erred in sustaining the order of CIT u/s 263 on altogether different ground which is unwarranted under any provisions of the Income Tax Act, 1961 (vi) That the orders of the Tribunal & CIT are legally unsustainable & bad in law and perverse.' 5. Assailing powers of the Commissioner of Income Tax (Appeals) of revision under Section 263 of the Income Tax Act, 1961, seeking support from Malabar Industrial Co. Ltd. v. CIT 243 ITR 83, it is claimed by the appellant-assessee that if order of the AO had incidentally resulted in loss to the revenue, it could not be said to be erroneous particularly when the Assessing Officer had adopted one of many possible views. It is claimed that merely because the Commissioner of Income Tax (Appeals) took recourse to another possible view, he could not have invoked Section 263 of the Act, as in addition to being prejudicial to the interests of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of Section 80HHC and 80IB are to be gone into but even provisions of Section 80IB(13) and of Section 80IA(9) are also to be appraised. 10. The AO framing the assessment under Section 143(3) of the Act vide order dated 27.3.2006 had allowed assessee's claim for deduction under Section 80HHC as also under Section 80IB without application of provisions of Section 80IB(13) read with Section 80IA(9) of the Act. 11. A perusal of the order of the Assessing Officer reveals that wittingly or unwittingly, consciously or unconsciously, this order does not refer to the provisions of Section 80IB(13) and Section 80IA(9) of the Act. It is strange that when the Assessing Officer had insight into the provisions of Section 80IB(13) and Section 80IA(9) as is reflected in notice (Annexure A-7), why no reference was made in the order (Annexure A-3), it is intriguing. It remains a fact that intentionally or unintentionally, no effect was given to the provisions of Section 80IB(13) and Section 80IA(9) of the Act. Because of omission of these provisions, order Annexure A-3 was rendered erroneous and undoubtedly was prejudicial to the interest of the revenue as well. 12. From a co-joint reading of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... low: "9. In Section 80-IA of the Act, deduction is allowable in respect of profits and gains from industrial undertaking or enterprises engaged in infrastructure development etc. equal to 100% of profits and gains derived from such business for 10 consecutive assessment years. Sub-section (9) provides for computation of procedure which clearly provides that deduction to the extent of such profits and gains shall not be allowed under other provisions of Chapter VIA on which the assessee has claimed and allowed deduction u/s 80IA. There does not exist any ambiguity in the mandate of the statute in the context of section 80IA(9). The prescription of section makes it very clear that where any amount of profits and gains is claimed and allowed u/s 80IA for any assessment year deduction to that extent of such profits and gains shall not be allowed under any other provisions of Chapter VIA." 15. It may be recapitulated that CIT vide order dated 28.3.2008 (Annexure A-2), has remitted the case to the Assessing Officer for recomputing the total income of the assessee keeping in view the provisions of Section 80IB(13) read with Section 80IA(9) in correlation with Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under any other provision of the Chapter." 18. More recently, this aspect has been dealt with at length in ITA No.312 of 2011 (Commissioner of Income Tax-I, Ludhiana v. M/s Abhishek Industries Limited) decided on 20.12.2012. In this judgment, authority cited as Commissioner of Income Tax v. Honda Siel Power Products Ltd., (2011) 333 ITR 547, cited by the assessee has also been referred to. Discussing Asstt. CIT Vs. Rogni Garments & Ors, (2007) 294 ITR 15 (Chennai), Commissioner of Income Tax v. Honda Siel Power Products Ltd (supra) as also Commissioner of Income Tax v. Max India Ltd., (2007) 295 ITR 282 (SC), Coordinate Bench of this Court had come to a firm finding that if an assessee has claimed deduction of profit or gains under Section 80IB, deduction under Section 80HHC is to be granted after reduction to the extent already allowed under Section 80IB. 19. Quoting Rogini Garment's case(supra), para 42 from the said judgment was reproduced which is also being appended here below: "42 Section 80HHC is part of Chapter VI-A. Hon'ble jurisdictional High Court in the case of CIT v. Sharon Vancers(P.) Ltd. [T.C. (A) No. 62 of 2004 dt. 26.02.207], has made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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