9911796707
TMI Blog2023 (2) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances in both the appeals of assessee are exactly identical and grounds raised are also identical and hence, we will take the facts from assessment year 2003-04. The grounds raised reads as under:- (a) The learned Commissioner of Income Tax (Appeals) erred in reducing the amount eligible for deduction under Section 801B from the "Profits and Gains of business" while computing deduction under Section 80HHC. The Appellant relies on the decision of Madras HC in the case of SCM Creations Vs ACIT, Circle I - Tirupur. (b) The learned Commissioner of Income tax (A) - III has erred in disallowing the write off of advance paid for purchase of goods. (c) The learned Commissioner of Income -tax (A) - III has erred in not considering the grounds of the appellant with reference to computation of total turnover for computing deduction under section 80 HHC. 3. Briefly stated facts are that the assessee company claimed deduction u/s.80IB of the Act. The AO while completing assessment required the assessee to file revised statement of computation for claim of deduction u/s.80IB of the Act, the AO allowed the claim of deduction at Rs.1,34,38,583/-. The AO noted that the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed u/s.80IA(1) of the Act. Finally, it was held that the effect of introduction of section 80IA(9) of the Act is merely all owability of deduction computed u/s.80HHC of the Act so that combined deduction u/s.80IA(1) and 80HHC of the Act does not exceed the profits and gains of the undertaking. The ld.counsel drew our attention to para 26 of the judgment of Hon'ble Bombay High Court, wherein by illustration this issue was explained as under:- 26. To illustrate, if the profits and gains of the eligible undertaking is Rs. 100, the deduction allowable under section 80-IA(1) is 30 per cent and the deduction allowable under section 80HHC is 80 per cent, then accord- ing to the Revenue, deduction to be allowed under section 80-IA would be Rs. 30 (30 per cent of Rs. 100) and in view of section 80-IA(9), the deduction under section 80HHC has to be computed not on the profits of the business of Rs. 100 but on Rs. 70 being the profits of the business reduced by the amount of profits allowed under section 80-IA(1). According to the assessee, deduction under section 80HHC has to be computed on the profits of the business of Rs. 100 and not on Rs. 70 as contended by the Revenue, because, ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be inferred that section 80-IA(9) is inserted with a view to affect computation of deduction under any other provisions under heading 'C' of Chapter VI-A. 34. It is well established in law that the language of the statute must be read as it is, and the statute must not be read by adding or substituting the words unless it is absolutely necessary to do so. Since section 80-IA(9) uses the words 'shall not be allowed', it is not permissible to read section 80-IA(9) by substituting the above words with the words 'shall not qualify' or by adding the words 'shall not be allowed in computing' the deduction under any other provisions under heading 'C' of Chapter VI-A of the Act. When the plain and simple meaning of section 80-IA(9) can be ascertained from the words used in the section, it would not be proper to construe the section by substituting or adding words as suggested by the revenue. 35. In these circumstances, in our opinion, the reasonable construction of section 80-IA(9) would be that where deduction is allowed under section 80-IA(1), then the deduction computed under other provisions under heading 'C' of Chapter VI-A has to be restricted to the profits of the business th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the distinction between exporters having a turnover above Rs.10 crore or below Rs.10 crore were directed to be treated similarly. The ld.counsel for the assessee drew our attention to p ara 27 of the judgment, which reads as under:- "27. We, accordingly, quash the impugned amendment only to this extent that the operation of the said section could be given effect from the date of amendment and not in respect of earlier assessment years of the assessees whose export turnover is above Rs.10 crore. In other words, the retrospective amendment should not be detrimental to any of the assessees." Against the High Court judgment these SLPs are filed by the Union of India. Mr. Mukul Rohtagi, learned Attorney General for India submits that once the prayer made was to severe the aforesaid two conditions as onerous and utra vires, the High Court should have couched the reliefs in terms of that prayer only, instead of stating that the operation of the Section would be given effect to prospectively only and these conditions would not operate retrospectively. At the same time, he accepts that the legal position would be that those exporters with turnover of rupees less than Rs. 10 crores and ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
