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TMI Blog2021 (2) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... d CIT(Appeals) erred in upholding the decision of the Assessing Officer of restricting the deductions under Chapter VI-A despite the fact that the aggregate of deductions under section 80IA and under section 80HHC was less than 100% of the profits of the business of the assessee. She ought to have allowed the appeal. 3. The learned CIT(Appeals) failed to appreciate that the claim of the appellant is completely in accordance with Board Circular No.772 dated 23-12-1998 and further supported by the decision of the Bombay High Court reported in 332 ITR 42, besides a number of decisions of co-ordinate benches of the Hon'ble Tribunal following the decision of the Bombay High Court. Consequently she erred in dismissing the appeal. 4. For the above grounds and such other grounds that may be urged at the time of hearing, the appellant prays that the appeal be allowed". 3. We notice at the outset with the able assistance of both the parties that the sole substantive issue that arises for our apt adjudication is that of correctness of both the lower authorities' action treating the assessees' claims of Section 80- IA and Section 80HHC deduction(s) as an instance of double deduction a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced while computing the deduction u/s.80HHC of the Act in view of provisions of sub section (9) of Sec.80IA of the Act and the Hon'ble ITAT relying on their own order in the assessee's own case in ITA No.1265/Hyd/05 for AY 1999-2000 dt.30-6-10 directed the AO to follow the method of computation shown in their order which in turn was based on the decision of Delhi ITAT Special Bench in the case of ACIT Vs Hindustan Mint & Agro Products Pvt.Ltd (SB)(Delhi) 315 ITR (AT) 1. 05.1 After discussing the decisions of various judicial authorities and the submissions of the appellant, the Assessing Officer concluded that the deduction allowed ujs.80IA is to be reduced from the eligible profits and on the balance profit alone, the deduction u/s.80HHC has to be allowed and followed the same principle for Asst.years 1999- 2000 and 2002-03 also. 06.0 In the statement of facts filed alongwith Form No.35, it has been submitted that for Asst.year 1999-2000, the appellant company was having six industrial undertakings and the appellant is entitled for 80IA deduction for Unit-II and Unit-IV Industrial undertakings at. Bollaram and Pashamylaram and for Asst.year 2002-03, the appellant c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y claiming repeated deductions in respect of the same amount of eligible income, even in cases where it exceeds such eligible profits of an undertaking or hotel, it is proposed to provide inbuilt restrictions in Section 80HHD and 80IA so that such unintended benefits are not passed on the assessee. This amendment is sought to be introduced retrospectively w.e.f.1-4-1990. 06.3 It has been pointed out that from the above said Explanatory Notes to the Finance Bill, the legislative intent is clear as only to restrict the deduction allowable under Chapter VIA as' not to exceed the 100% profits of Industrial undertaking, this provision has been introduced. Therefore, this section does not enable the Assessing Officer to reduce the quantum of deduction allowable u/s.80IA and only on the balance, 80HHCshouid be allowed. The quantification of deductions is governed independently under both the sections with reference to the entire profits of the Industrial Undertaking without any deduction there from. Once the assessee is entitled to both the deductions, these too put together should not exceed the total profits of the Industrial undertaking as per the provisions of. Sec.80IA(9). Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble ITAT set aside the orders of CIT(A) and directed the Assessing Officer to allow the impugned deductions in the manner explained in the case of Associated Capsules (P) ltd.(Supra). 07.0 I have gone through the facts of the case. It may be noted that the Hon'ble ITAT, Hyderabad set 'aside the order of the Assessing Officer with a clear direction to follow the decision of Special Bench in the case of Hindustan Mint and Agro Products Private limited (Supra) and the Assessing Officer followed the direction and passed the consequential order accordingly. The object of amending section 80IA by Finance Act,1998 as is evident from the Memorandum explaining the provisions in the Finance Bill, 1998 (231 ITR (ST) 252) is to avoid misuse of the deductions under Chapter-VIA where combined deductions under various sections claimed exceeded 100% deduction on the profits and gains of the undertaking. With a view to prevent the taxpayer taking undue advantage of existing provisions of the Act, Section 80IA was amended by Finance Act, 1998 so that the deductions allowed u/s.80IA and various sections under heading 'C' of Chapter-VIA are restricted to the profits of the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is held that the legal position has changed, the same deserves to be upheld. We notice in this factual backdrop that the assessees' instant four appeals are pending since the year 2013. The 'lead' appeal ITA No.1507/Hyd/2013 has seen thirty six adjournments in all. Case file(s) notings therein sufficiently indicate that the tribunal had proceeded to await the hon'ble apex court's decision in ACIT Vs. Micro Labs Ltd. [380 ITR 1] (SC). Hon'ble division bench of the apex court had formed a divergent opinion qua the issue of double deduction which finally culminated in a reference made to a larger bench. Learned co-ordinate bench earlier directions in the case records dt.02-06-2016, 18-09-2017 and 01-10-2019 made it clear that postponement of hearing in the instant batch of four appeals was warranted to clarify the final status of hon'ble apex court's trial order only. 5. Learned counsel in this factual backdrop has filed a copy of the status report pertaining to the hon'ble apex court final decision on the issue as it is evident from the official site. Learned CIT-DR fails to dispute that the Revenue's Special Leave Petition (C) No.031153/12 registered on 08-10-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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