CONTINENTAL CONSTRUCTION LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The appellants have sought to raise the question of the constitutional validity of Section 80-HHB(5) of the Income Tax Act, 1961 . The sub-sec. provides that if any deduction is permitted under the provisions of Section 80-HHB(1) from any consideration receivable by the assessee within the description in that sub-section, the same income would not qualify for deduction under any other provision of the Act. Learned counsel appearing on behalf of the appellants fairly conceded that if the only object of the section was to deny double deduction on the same income, it could not be said that the sub-sec. was unconstitutional. However the submission according to the appellant, the unconstitutionality of the sub-sec. is as a result of the decision of this Court in the appellant's own case in Continental Construction Ltd. V/s. CIT. It is submitted that as a result of this decision, sub-section (5) would operate not only to deny double deduction but also to deny deduction which is otherwise available to an assessee under the other provisions of that chapter including Section 80-O.

(2.) We have perused the Judgement of this Court and have found that it did not hold that income which was not wholly relatable to Section 80-HHB would not be available for deduction under any other provision in respect of such unrelatable income. This Court construed the provisions of Section 80-HHB and Section 80-O and came to the conclusion that there could be different forms of foreign contracts, the consideration whereunder was available for deduction either under Section 80-O or Section 80-HHB. The Court held that where the relief was clearly referable only to Section 80-O, the assessee would continue to receive deduction available thereunder. But in the case of the appellants, as the consideration received was relatable only to Section 80-HHB, the only deduction available was under Section 80-HHB. Given this, the challenge to the constitutionality of Section 80-HHB(5) must fail.

(3.) Perhaps this is the reason why the appellants' counsel did not seriously argue the question of constitutionality before the High Court. No submission also appears to have been made before this Court in the course of the earlier proceedings that the interpretation of Sections 80-O and 80-HHB given by the Court would have the result of rendering Section 80-HHB (5) unconstitutional.