COMMISSIONER OF INCOME TAX Vs. AMOD STAMPING

JUDGEMENT

(1.) In this reference at the instance of the revenue, the following question of law has been referred for our opinion for the assessment year 1989-90:-

(2.) We have heard Mr Manish R Bhatt, learned Standing Counsel for the revenue. Though served, none appears for the respondent-assessee.

(3.) At the hearing of this reference, our attention is invited to the decision dated 13/14th June 2001 of another Division Bench of this Court in Income Tax Reference No.282 of 1985 wherein this Court examined the scheme of the provisions of Section 80HH and Section 80J and after considering the legislative history, the object of granting deductions under the above provisions, the manner in which the deduction is to be calculated and the fact that the benefit of deduction under Section 80HH is given to those industrial units which established their industries in a backward area, whereas deduction under Section 80J is given to new industrial units, without any such geographical limitations, and also that the provisions of Section 80J permit carry forward if the assessee is not able to avail complete deduction under Section 80J on account of not having sufficient profits, this Court interpreted the provisions of Section 80HH(9) to mean that while first of all the benefit under the provision of Section 80HH is to be given to the assessee, if the profits are sufficient to absorb the deduction under Section 80J or a part thereof and if the profits are not sufficient then the deduction under Section 80J is to be carried forward as per subsection (3) thereof. It does not mean that while giving effect to the deduction under Section 80J, the deduction available under Section 80HH is to be deducted from the profits. Accordingly, this Court answered the question in that case in favour of the assessee and against the revenue.