PAUSHAK LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE following question has been referred to this Court by the Tribunal, Ahmedabad, under S. 256 (1) of the IT Act, 1961 : "Whether in view of the facts and circumstances of the case, the Tribunal was right in law in holding that the relief under S. 80HH of the IT Act, 1961, should be considered after considering unabsorbed losses and depreciation ?"

(2.) THE assessee installed Carbaryl plant in a backward area. In the asst. year 1976 77, the assessee claimed deduction of 20 per cent on the profits derived from the said Carbaryl plant under S. 80HH of the Act. The contention of the assessee before the ITO was that for determination of the relief under S. 80HH of the Act, the gross total income had to be worked out without deduction of unabsorbed losses and unabsorbed depreciation. The ITO did not accept this contention and worked out the gross total income after deducting unabsorbed losses for the asst. year 1976 77 and unabsorbed depreciation. The assessee carried the matter in appeal before the CIT. The contention raised by the assessee found favour with the CIT and, therefore, the appeal of the assessee was allowed. The Tribunal reversed the decision of the CIT as it agreed with the view taken by the ITO and, therefore, restored the order passed by the ITO. The assessee, therefore, sought a reference to this Court.

(3.) FOLLOWING the said judgments, we answer the question in the affirmative, that is, against the assessee and in favour of the Revenue. Reference is disposed of accordingly. No order as to costs.