COMMISSIONER OF INCOME TAX AND THE ASSISTANT COMMISSIONER OF INCOME TAX AND OTHERS ETC. ETC. Vs. MILLIPORE INDIA PVT. LTD. AND OTHERS ETC. ETC.

JUDGEMENT

(1.) TRIBUNAL in few cases did not grant the aforesaid relief and the Assessee are in appeal. The question of law involved in all these appeals are one and the same, and therefore they are taken up for consideration together and disposed off by this common order.

(2.) THE question of law that arises for consideration is as under: When the deduction of profits and gains of an undertaking is allowed under Section 80 IA, whether such profits and gains has to be deducted before computation of the profits and gains under Section 80HHC or after arriving at the profits and gains of business?

(3.) THE Assessee is engaged in the manufacture and export of garments. For the assessment year 2001 -2002, he filed a return of income. The Assessing Officer proceeded to pass an assessment order under Section 143 (3) on 19.03.2004. The Commissioner exercising its jurisdiction under Section 263 of the Act found that the order of the assessment is erroneous and prejudicial to the interest of the revenue. It was held that the Assessing Officer in the original assessment order has not reduced the deductions allowable under Section 80IB before computing the deductions admissible under Section 80HHC as required under Section 80IB (13) read with Section 80IA (9) of the Act. The Assessing Officer was directed to re -do the assessment in accordance with the direction as per the order dated 30.12.2004. In terms of the directions issued, the Assessing Officer has passed an order on 14.03.2005. A perusal of the said order shows the total income declared was Rs. 3,53,49,850/ -. The Assessee was entitled to a deduction under Section 80 IB in a sum of Rs. 88,37,463/ -. While calculating the benefit under Section 80 HHC, the Assessing Officer deducted the amount of Rs. 88,37,463/ - out of the profits of the business declared after giving other benefits under the said provision. The benefit to which the Assessee is entitled under Section 80HHC was restricted to Rs. 2,03,83,961/ -as against Rs. 2,50,52,596/ - claimed by the Assessee and allowed by the Assessing Officer in the earlier order at the first instance.