TMI Blog1991 (7) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... duction as contemplated by section 80HH, the profit as reduced by allowing investment allowance was not the legal way to compute the same. On an appeal being preferred, the Appellate Assistant Commissioner rejected the case of the assessee. The Tribunal, however, accepted the contention. At this, the Department felt aggrieved and, at its behest, the following question has been referred to this court for answer : "Whether the Income-tax Appellate Tribunal was correct in directing allowance of relief under section. 80HH on profits of the industrial undertaking before deducting the investment allowance allowed under section 32A of the Income-tax Act ?" To answer the aforesaid question, we may note section 80HH(1) of the Act : "80HH. Dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt allowance was not required to be deducted from the profit as determined by the Incometax Officer to give the relief contemplated by section 80HH. From a perusal of the order of the Tribunal, it appears that it had applied its mind to the case of Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84 (SC), in taking the view which had appealed to it. In that case, the question for decision was whether profit under section 41(2) of the Act had to be included for granting relief as contemplated by section 80E of the Act. The apex court answered the question in the affirmative. This had been done because section 80E, as it stood at the relevant time, had stated that "where the total income (as computed in accordance with the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me, investment allowance dealt with by section 32A has to be taken note of. The ratio of Cambay Electric Supply Industrial Co.'s case [1978] 113 ITR 84 (SC) cannot, therefore, be ignored. But then, section 80HH requires granting of deduction from the profits and gains derived from the industrial undertakings., In this connection, it is worthwhile to point out that, according to the provisions of the Act, income is different from profit, though the former includes the latter. The various provisions of the Act would bear out the statement that, though an industrial undertaking may earn profit, its gross total income may be substantially less than the figure of profit, and the taxable income may, in some, cases, become nil. As section 80HH d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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