9911796707
TMI Blog2009 (3) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounting period being from 1.1.1988 to 31.3.1989. The assessee, a Company, claimed deduction u/s.80HH of the Income Tax Act, 1961 (the Act). The same was disallowed by the Assessing Officer holding that the assessee carried on manufacturing activity at Chhatral which is situated in Kalol Taluka of Mehsana District. That by virtue of Notification No. 89/165 dated 19.12.1986, Kalol Taluka was excluded from the list of 'backward area" and thus the assessee was not entitled to relief u/s.80HH of the Act. The Assessing Officer also referred to subsequent Clarification to the Notification to the effect that where production had commenced in Kalol Taluka before October, 1986, such a unit would be entitled to deduction u/s.80HH of the Act. Thereaf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 987) 165 ITR (Statute) 294]. That by virtue of the said Notification, Kalol Taluka of Mehsana District was excluded from the list of "backward area" and, therefore, the assessee was not entitled to any relief. 6. Referring to Circular No. 484 dated 1.5.1987 it was submitted that the Central Board of Direct Taxes (CBDT) had issued clarification on the subject of "backward area" for the purpose of section 80HH of the Act wherein it was stated that the benefit of the said provision in respect of any area will not be withdrawn retrospectively and all areas specified in the Eighth Schedule will continue to enjoy the benefit of section 80HH of the Act in respect of industrial undertaking which begins to manufacture or produce articles before 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions) Act, 1986, with effect from 10.09.1986 the Explanation below sub-section (10) of Section 80HH of the Act was omitted and sub-section (11) came to be inserted in Section 80HH of the Act. By virtue of the said provision, the legislative scheme underwent a partial modification vesting Central Government with powers to issue Notification for the purpose of section 80HH of the Act, to define "backward area", having regard to the stage of development of that area. 9. In exercise of the said powers Notification No. S.O. 165, dated 19.12.1986 came to be issued and in so far as Mehsana District is concerned Kalol Taluka stood excluded. Subsequently, legislature realised that problems arose because of such omission and, hence, the clarific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d notifying the list of backward areas. In this notification, certain blocks/taluks, where investment had exceeded Rs.30 crores as on 31-3-1983 were excluded. 2. In the interest of administrative convenience, it has been decided that the benefit of section 80HH in respect of any area will not be withdrawn retrospectively. The Taxation Laws (Amendment and Miscellaneous Provisions) Bill, 1986, received the assent of the President on 10-9-1986. It is, therefore, clarified that notwithstanding the aforesaid notification, all areas specified in the Eighth Schedule will continue to enjoy the benefit of section 80HH in respect of an industrial undertaking which begins to manufacture or produce articles before 10-9-1986 or in respect of the busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mine whether the industrial undertaking was located in a "backward area" listed in Eighth Schedule of the Act. If the answer is yes, the only inquiry thereafter is, as to whether unit had commenced manufacturing or production of articles on or before 10.09.1986. 11. Applying the aforesaid scheme of the Act, which unfolds on a conjoint reading of provisions of section 80HH of the Act and the Notification and the Circular issued thereafter, as can be seen from the impugned order of Tribunal, no independent reasons are assigned but the Tribunal has followed its own order in assessee's own case for earlier Assessment Year. A copy of order for Assessment Year 1988-89 made by the Tribunal has been placed on record and paragraph Nos. 4 & 5 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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