Deputy Commissioner Of Income Taxspecial Range-I, Coimbatore v. M/S. Chola Textiles Pvt. Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR. JUSTICE K. RAVIRAJA PANDIANANDTHE HONOURABLE MRS. JUSTICE CHITRA VENKATARAMAN TAX CASE NO.344 OF 2004 Deputy Commissioner of Income TaxSpecial Range-I, Coimbatore. ... Appellant Vs. M/s. Chola Textiles Pvt. Ltd.,20, Dharapuram RoadTiruppur – 638 608. Tiruppur – 638 608.... RespondentTax Case Appeal filed against the order of the Income Tax AppellateTribunal,Chennai`A'Bench,Chennai,dated12.3.2001inITA.No.1265/Mds/93 as against in ITA.No.795-C/92-93 dated 23.2.92 on thefile of Commissioner of Income Tax (Appeals) Coimbatore as against inPAN/GIR/No.CQ.2247/SRI/CBE dated 23.12.92 on the file of DeputyCommissioner of Income Tax Spl. range-I, Coimbatore. For Appellant : Mr. N. Muralikumaran For Respondent : Mr. Venkatanarayanan for M/s. SubbarayaAiyar (Judgment of the Court was delivered byK. Raviraja Pandian, J. The Revenue has filed this appeal against the order of theIncome Tax Appellate Tribunal made in ITA.No.1265/Mds/1993, dated12.3.2001. The relevant assessment year is 1991-1992. 2. The facts as culled out from the statement go as follows:- https://hcservices.ecourts.gov.in/hcservices/ 3. We heard the argument of the learned counsel for the Revenueand the learned counsel for the assessee and perused the materialsavailable on record. The assessee is a closely held company and had filed a return on27.12.1991 declaring taxable income of Rs.27,79,910/-. Intimation underSection 143(1)(a) was given on 13.1.1992 and the same was rectified underSection 154 of the Income Tax Act on 17.3.1992. Aggrieved by therectification, the assessee filed an appeal and the same was dismissed bythe Commissioner of Income Tax (Appeals) vide order dated 9.7.1992. Theassessee claimed deduction under Section 80HH at 20% and 80-I at 25% ofthe income returned. The Assessing Officer passed orders granting reliefunder Section 80-I on the gross total income as reduced by deductionunder Section 80HH on the view that as per Section 80HH(9) firstdeduction under Section 80HH was to be given and the balance amount onlyqualified for deduction under Section 80-I. On appeal, the Commissioner ofIncome Tax reversed the finding of the Assessing Officer and directed himto quantify the admissible relief under Section 80-I without adjusting thededuction allowed under Section 80HH. The revenue carried the matter onappeal to the Income Tax Appellate Tribunal, which confirmed the orders ofthe Commissioner of Income Tax (Appeals). The correctness of the order isnow canvassed in this appeal by the revenue. 4. At the time of admission, the appeal was admitted on thefollowing substantial questions of law:-" i) Whether, on the facts and in the circumstances of thecase, the Tribunal was right in law in upholding the orderof the CIT(A) that the amount of deduction allowed underSection 80HH is to be reduced from the total income whilecalculating the admissible deductions under Section 80I ofthe Income Tax Act? ii) Whether, on the facts and in the circumstances of thecase, the Tribunal was right in allowing the deductionunder Section 80I without reducing the deduction allowedunder Section 80HH? 5. It is submitted across the bar by the learned counselappearing for either side that the very issue has been considered and heldagainst the revenue by the Madhya Pradesh High Court in the case ofJ.P.TOBACCO PRODUCTS P.LTD. VS. COMMISSIONER OF INCOME TAX reported in(1998) 229 ITR 123. It has also been further submitted that the BombayHigh Court also has taken the same view in the case of COMMISSIONER OFINCOME-TAX VS. NIMA SPECIFIC FAMILY TRUST reported in (2001) 248 ITR 29.The judgment of the Madhya Pradesh High Court has been taken to theSupreme Court and the Supreme Court in JOINT COMMISSIONER OF INCOME-TAXVS. MANDIDEEP ENGINEERING AND PACKAGING INDUSTRIES P.LTD., (2007) 292 ITR1, has rejected the S.L.P., by giving the following reasons: 5. It is submitted across the bar by the learned counselappearing for either side that the very issue has been considered and heldagainst the revenue by the Madhya Pradesh High Court in the case ofJ.P.TOBACCO PRODUCTS P.LTD. VS. COMMISSIONER OF INCOME TAX reported in(1998) 229 ITR 123. It has also been further submitted that the BombayHigh Court also has taken the same view in the case of COMMISSIONER OFINCOME-TAX VS. NIMA SPECIFIC FAMILY TRUST reported in (2001) 248 ITR 29.The judgment of the Madhya Pradesh High Court has been taken to theSupreme Court and the Supreme Court in JOINT COMMISSIONER OF INCOME-TAXVS. MANDIDEEP ENGINEERING AND PACKAGING INDUSTRIES P.LTD., (2007) 292 ITR1, has rejected the S.L.P., by giving the following reasons: "... 2. The Madhya Pradesh High Court in J.P.TobaccoProducts P.Ltd. v. CIT reported in (1998) 229 ITR 123 took theview that both the sections are independent and, therefore, thedeductions could be claimed both under sections 80HH and 80-I onthe gross total income. Against this judgment, a special leavepetition was filed in this Court which was dismissed on theground of delay on July 21, 2000 (see (2000) 245 ITR (St.) 71).The decision in J.P.Tobacco Products P.Ltd. (1998) 229 ITR 123(MP) was followed by the same High Court in the case of CIT v.Alpine Solvex P.Ltd. in I.T.A.No.92 of 1999 decided on Ma;y 2,2000. Special leave petition against this was dismissed by thiscurt on January 12, 2001, (see (2001) 247 ITR (St.) 36). Thisview has been followed repeatedly by different High Courts in anumber of cases against which no special leave petitions werefiled meaning thereby that the Department has accepted the viewtaken in these judgments. See CIT v. Nima Specific Family Trustreported in (2001) 248 ITR 29 (Bom); CIT v. Chokshi ContactsP.Ltd. (2001) 251 ITR 587 (Raj); CIT v. Amod Stamping (2005) 274ITR 176 (Guj); CIT v. Mittal Appliances P.Ltd. (2004) 270 ITR 65(MP); CIT v. Rochiram and Sons (2004) 271 ITR 444 (Raj); CIT v.Prakash Chandra Basant Kumar (2005) 276 ITR 664 (MP); CIT v.S.B.Oil Industries P.Ltd. (2005) 274 ITR 495 (P&H); CIT v. SKGEngineering P.Ltd. (2005) 119 DLT 673 = (2006) 285 ITR 423(Delhi) and CIT v. Lucky Laboratories Ltd. (2006) 200 CTR 305 (All) Since the special leave petitions filed against the judgmentof the Madhya Pradesh High Court have been dismissed and theDepartment has not filed the special leave petitions against thejudgments of different High Courts following the view taken bythe Madhya Pradesh High Court, we do not find any merit in thisappeal. The Department having accepted the view taken in thosejudgments cannot be permitted to take a contrary view in thepresent case involving the same point. Accordingly, the civilappeal is dismissed. No costs" 6. In view of the decision of the Supreme Court referred tosupra, the above tax case appeal is dismissed. No costs.kb Sd/-Asst.Registrar /true copy/ Sub Asst.Registrar To, 1. Assistant Registrar, Income Tax App. Tribunal, IIIrd floor, Rajaji Bhavan, Besant Nagar, Chennai-90. 2. The Commissioner of Income Tax Appeals, Coimbatore. 3. The Deputy Commissioner of Income Tax, Spl.Range-I, Coimbatore. +1 cc to Mr.N.Muralikumaran, Sr.S.C.for I.T.(SR.No.61780) KA(co)dcp/22.10 T.C.No.344 of 2004