TMI Blog1990 (11) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... e relief under section 80HH of the Income-tax Act, 1961 ?" In the assessment year 1979-80, Messrs. Sterling Foods, Mangalore, received a sum of Rs. 3,09,800 by way of sale of import licences and export commission. In the return filed, they claimed relief in respect of that receipt under section 80HH in respect of sale of import licences. The Income-tax Officer held that since the profit derived from the industrial undertaking resulted in a negative figure, no deduction under section 80HH was admissible. Therefore, he rejected the claim of the assessee. On appeal, the Commissioner of Income-tax (Appeals) held that the receipts on sale of import licences were revenue receipts and as such there was no question of relief under section 80HH on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follow the answer rendered by this court to the identical question raised for an earlier assessment year but for the fact that section 28 of the Income-tax Act, 1961, has been amended by the Finance Act of 1990 with effect from April 1, 1962, by the insertion of clause (iiia) and clause (iiib) with effect from April 1, 1967, and they read as follows : "(iiia) profits on sale of a licence granted under the Imports (Control) Order, 1955, made under the Imports and Exports (Control) Act, 1947 (18 of 1947) ;" "(iiib) cash assistance (by whatever name called) received or receivable by any person against exports under any scheme of the Government of India ;" Section 28 provides for what income shall be chargeable to income-tax under the he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x for the year 1939-40. That assessment came to be set aside by the Income-tax Appellate Tribunal on March 28, 1942, on the ground that the Indian Finance Act, 1939, was not in force during the assessment year 1939-40 in Chota Nagpur which was a partially excluded area. On reference under section 66, the High Court agreed with the view of the Appellate Tribunal by its judgment dated September 30, 1943. On June 30, 1942, Bihar Regulation IV of 1942 was promulgated by which the Indian Finance Act of 1939 was brought into force in Chota Nagpur retrospectively from March 30, 1939. The Income-tax Officer thereupon passed an order on February 8, 1944, to the effect that the income of the assessee for the year 1939-40 has escaped assessment and is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de to it. Admittedly, the Regulation was passed after the decision of the Income-tax Appellate Tribunal. Notwithstanding that Regulation IV of 1942 purported to be retrospective, it cannot have the effect of effacing the result brought about by the decision of the Income-tax Appellate Tribunal and the High Court on reference, unless there are clear and express words to that effect. " (emphasis supplied). Undoubtedly, the above observation has been made by the Supreme Court in that case. Observations made by the Supreme Court in repelling the contention advanced on behalf of the assessee must be noted to have been made in the context of that case. Even then, if one were to notice the observation to which we have been drawn attention by sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation that would have been allowed had the income not been exempted under an agreement with a Ruler. He further says that this order is retrospective because it expressly says that the expression 'all depreciation actually allowed under any laws or rules of a merged State shall be deemed always to have meant . . .' Mr. Desai, learned counsel for the respondent, objects to this Order being relied on by Mr. Sastri on various grounds. He further says that on true interpretation of the Order, it does not apply to the case of the assessee. The question then arises whether we are entitled to take into consideration the 1962 Order. Learned counsel has cited various cases and has argued that this being an appeal by special leave from a reference, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the light of the law as amended or if it necessitates investigation of facts which have not been investigated, the High Court may refuse to answer the question. Application of the relevant law to a problem raised by the reference before the High Court is not normally excluded merely because at the date when the Tribunal decided the question the relevant law was not or could not be brought to its notice.' Therefore, following this judgment, we must hold that Mr. Sastri is entitled to rely on the 1962 Order and it is our duty to answer the reference in accordance with the amendment made by the Order, unless the question referred is not couched in terms of sufficient amplitude to cover an enquiry into the question in the light of the am ..... X X X X Extracts X X X X X X X X Extracts X X X X
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