TMI Blog2017 (1) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... /2011 - - - Dated:- 30-12-2016 - Sri Aby T. Varkey, JM And Dr. Arjun Lal Saini, AM For the Appellant : Shri Rajat Kumar Kureel, JCIT, Sr.DR For the Respondent : Shri Harish Agarwal, AR ORDER Per Aby T. Varkey, JM These are appeals preferred by the Revenue against the orders of CIT(A)-XII, Kolkata dated 18.01.2011 for AY 2003-04 and 2004-05. 2. The Revenue has raised the following ground :- On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in directing to recomputed the deduction u/s 80HHC without reducing the amount of deduction u/s 80IB from the eligible profits. 3. The brief facts of the case as noted by the ld. CIT(A) are that during the previous year relevant to the assessment year under consideration, the appellant in the original return of income has claimed an amount of ₹ 29,79,001/- as deduction u/s 80HHC. Subsequently in the Revised return of income; deduction u/s 80HHC was recomputed and claimed at ₹ 28,79,554/-. Towards the said claim of the appellant a Chartered Accountant's Certificate (along with enclosures) was duly furnished and filed along with the revised return of income. While ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of certain incomes of the Chapter in which Section 80HHC has been included. Similarly, it had been submitted by the learned DR that so far as Section 80- IB is concerned, it pertains to deduction in respect of profits and gains from certain industrial undertakings other than the business of infrastructure development. He further reiterated that Section 80-IB(13) also provides that certain provisions of Section 80-IA would also apply to Section 80-1 B, like the provisions of Sub-Section (5) and Sub- Sections (7) to (12) of Section 80-IA. 8. According to the learned DR, Section 80-IA(9) is clear to the effect that once a deduction is claimed under Section 80-IA, no deduction can be claimed under heading 'C' of Chapter VIA. Section 80HHC is included in heading 'C' of Chapter VIA and therefore, if an assessee claims and is allowed deduction under Section 80-IA or Section 80-IB, he cannot be allowed any deduction under Section 80HHC or any other Section that falls under heading C of Chapter VIA of the Act and wanted us to reverse the order of the ld. CIT(A) and uphold AO order. 9. On the other hand, the learn Counsel appearing for the Assessee submitted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of better understanding of this issue, relevant extracts of the said sections of the Act have been reproduced herein below :- 80-IB Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings (1) Where the gross total income of an Assessee includes any profits and gains derived from any business referred to in sub-sections (3) to (11), (11A) and (11B) (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of the Section, be allowed, in computing the total income of the Assessee, a deduction from such profits and gains of an amount equal to such percentage and for such number of assessment years as specified in this Section. (2) to (12 )xxxxxx xxxxx xxxxxxx (13) The provisions contained in sub-Section (5) and sub-Section (7) to (12) of Section 80-IA shall, so far as may be, apply to the eligible business under this Section. 80-lA. Deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc. - (1) to (8) xxx xxx xxx (9) Where any am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of the assessment year beginning on the 1t day of April, 2005 and any subsequent assessment year. 13. The Hon ble Bombay High Court in the case of Associated Capsules Private Limited v. Deputy Commissioner of Income Tax and another, [2011] 332 ITR 42 (Bom) did not agree with the view of the High Court of Delhi and opined thus:- We find it difficult to subscribe to the views expressed by the Delhi High Court in interpreting the provisions of section 80-IA(9). I n that case, in fact, the counsel for the Revenue had argued (see para 38 of the judgment) that section 80-IA(9) applies at the stage of allowing deduction and not at the stage of computing deduction under other provisions under heading C of Chapter VI-A. It was argued that in the matter of grant of deduction, the first stage is computation of deduction and the second stage is the allowance of the deduction. Computation of deduction has to be made as provided in the respective sections and it is only at the stage of allowing deduction under section 80-IA(1) and also under other provisions under heading C of Chapter VI-A, the provisions of section 80-IA(9) come into operation. While accepting the arguments advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee qualifies for deduction under separate sections, which could be on percentage of profits or earnings, controversy arises and the Hon ble Supreme Court observed about the scope of Chapter VIA in such situations was noticed in Joint CIT v. Mandideep Engineering and Packaging Industries Private Limited, (2007) 292 ITR 1 (SC), and held :- 1. The point involved in the present case is whether sections 80HH and 80-I of the Income-tax Act. 1961, are independent of each other and therefore a new industrial unit can claim deductions under both the sections on the gross total income independently or that deduction under section 80-I can be taken on the reduced balance after taking into account the benefit taken under section 80HH. 2. The Madhya Pradesh High Court in J.P. Tobacco Products P. Ltd v. CIT reported in [1998] 299 ITR 123 took 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. Tobacc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction u/s 80lA, the deduction u/s 80HHD need not be reduced as both the deductions are independent of each other, which we agree and concur with the said view. 17. It is also a well settled position of law that in a case where two views are possible, the view which favours the assessee must be adopted. The said view has been affirmed by the Hon'ble Supreme Court in CIT -vs.- Vegetable Products Ltd.(1973) 88 ITR 192(SC) wherein it has been held that if two reasonable constructions of a taxing provision are possible, that construction which favours the assessee must be adopted, which is a well-accepted rule of construction. Similar view has been taken in ACIT -vs.- Hindustan Steel Industries (2005) 94 TIT 1094 (Agra Trib) and DCIT- vs.- Oxemberg Fashions Ltd. (2007) 111 TTJ 0737 (Mum) and so applying the same principle when there are divergent views, the view favourable to the assessee is upheld and therefore also we concur with the contention of the assessee and thus confirm the order of the ld. CIT(A). 18. In view of the above, we do not find any infirmity in the order of the ld. CIT(A) and therefore we dismiss the appeals of the revenue. Order pronounced in the Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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