The Commissioner Of Income Tax-I Chennai 3 v. M/S.mrf Limited 124 Greams Road Chennai 6

Dated :27.10.2009 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIANandTHE HONOURABLE MR.JUSTICE M.M.SUNDRESH Tax Case (Appeal) No.1020 of 2009 The Commissioner of Income Tax-IChennai 3. .. Appellant Vs. M/s.MRF Limited124 Greams RoadChennai 6. .. Respondent Tax Case (Appeal) preferred under section 260A of the Income Tax Act, 1961, against the order ofthe Income Tax Appellate Tribunal, Madras 'D' Bench, dated 11.02.2009 in ITA No.716/Mds/2008 forthe assessment year 2004-2005. For appellant : Mr.K.SubramanianStanding Counsel forIncome Tax Department JUDGMENT (Judgment of the Court was delivered byK.RAVIRAJA PANDIAN, J.) The revenue is on appeal against the order of the Income Tax Appellate Tribunal,Madras D Bench,Chennai dated 11.2.2009 passed in ITA.No.716/Mds/2008 relating to the assessment year 2004-05.2. The Statement of facts culled out from the memorandum of grounds are as follows:-The assessee company is engaged in the business of manufacture and sale of automobile tyres,tubes, flaps and other rubber products, paints and trading in sports goods, machinery and spares.For the assessment year 2004-05, the assessee company filed its return of income on 29.10.2004declaring an income of Rs.65,98,11,813/-. While computing the asessment, the Assessing Officerinvoked the provisions of Section 80IA(9) and deducted the quantum of claim under Section 80IBfrom the business profit while computing the deduction under section 80HHC. Aggrieved by theorder of the assessment, the assessee carried the matter on appeal. The Commissioner of Appeals byfollowing the Tribunal's order in the case of Assistant Commissioner of Income Tax Vs.RoginiGarments (294 ITR (AT) 15) confirmed the order of assessment. The assessee carried the matter onfurther appeal to the Tribunal. The Tribunal following the Division Bench judgment of this court inthe case of SCM Creations Vs. Assistant Commissioner of Income Tax (304 ITR 319(Mad) allowedthe appeal of the assessee. The correctness of the same is now put in issue in this appeal by 1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right inholding that while computing the deduction under Section 80HHC, the deduction allowed underSection 80IB need not be reduced from the business profits ? 3. As stated already in the summation of facts, the Tribunal has followed the judgment rendered bythe Division Bench of this court in the case of SCM Creation vs. Assistant Commissioner of IncomeTax reported in 304 ITR 319 in which one of us (K.Raviraja Pandian,J) is a party. In the said decision,the question of law has already been decided against the Revenue by observing as follows:-" 4. The counsel on either side submits that the issue has to be decided in favour of the assessee, asthis Court already, by following the decision of [2007] 292 ITR 1 (SC) (Joint Commissioner of IncomeTax vs. Mandideep Engineering and Packaging Industries (P) Ltd.,) has decided the issue in favour ofthe assessee in T.C.No.344 of 2004, (since reported as Deputy CIT v. Chola Textiles P. Ltd.[2008]304 ITR 256 (Mad)wherein this Court has held as follows:- " 5. It is submitted across the bar by the learned counsel appearing for either side that the very issuehas been considered and held against 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) 229ITR 123. It has also been further submitted that the Bombay High Court also has taken the sameview in the case of COMMISSIONER OF INCOME-TAX VS. NIMA SPECIFIC FAMILY TRUSTreported in (2001) 248 ITR 29. The judgment of the Madhya Pradesh High Court has been taken tothe Supreme Court and the Supreme Court in JOINT COMMISSIONER OF INCOME-TAX VS.MANDIDEEP ENGINEERING AND PACKAGING INDUSTRIES P.LTD., (2007) 292 ITR 1, hasrejected the S.L.P., by giving the following reasons: " 5. It is submitted across the bar by the learned counsel appearing for either side that the very issuehas been considered and held against 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) 229ITR 123. It has also been further submitted that the Bombay High Court also has taken the sameview in the case of COMMISSIONER OF INCOME-TAX VS. NIMA SPECIFIC FAMILY TRUSTreported in (2001) 248 ITR 29. The judgment of the Madhya Pradesh High Court has been taken tothe Supreme Court and the Supreme Court in JOINT COMMISSIONER OF INCOME-TAX VS.MANDIDEEP ENGINEERING AND PACKAGING INDUSTRIES P.LTD., (2007) 292 ITR 1, hasrejected the S.L.P., by giving the following reasons: "... 2. The Madhya Pradesh High Court in J.P.Tobacco Products P.Ltd. v. CIT reported in (1998) 229ITR 123 took the view that both the sections are independent and, therefore, the deductions couldbe claimed both under sections 80HH and 80-I on the gross total income. Against this judgment, aspecial leave petition was filed in this Court which was dismissed on the ground 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 of1999 decided on Ma;y 2, 2000. Special leave petition against this was dismissed by this curt onJanuary 12, 2001, (see (2001) 247 ITR (St.) 36). This view has been followed repeatedly by differentHigh Courts in a number of cases against which no special leave petitions were filed meaningthereby that the Department has accepted the view taken in these judgments. See CIT v. NimaSpecific Family Trust reported in (2001) 248 ITR 29 (Bom); CIT v. Chokshi Contacts P.Ltd. (2001)251 ITR 587 (Raj); CIT v. Amod Stamping (2005) 274 ITR 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. PrakashChandra Basant Kumar (2005) 276 ITR 664 (MP); CIT v. S.B.Oil Industries P.Ltd. (2005) 274 ITR 495(P&H); CIT v. SKG Engineering 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 judgment of the Madhya Pradesh High Court havebeen dismissed and the Department has not filed the special leave petitions against the judgments ofdifferent High Courts following the view taken by the Madhya Pradesh High Court, we do not findany merit in this appeal. The Department having accepted the view taken in those judgments cannotbe permitted to take a contrary view in the present case involving the same point. Accordingly, thecivil appeal is dismissed. No costs" Following the same, the appeals are allowed to the extent indicated above". 4. By following the very same Judgment, the present tax case appeal is also dismissed. No costs. krr/ To The Income Tax Appellate Tribunal,"D" Bench,Chennai