CIT Vs. KEDIA LEATHER AND LIQUOR LTD.

JUDGEMENT

(1.) BY this appeal, the appellant assails the order of the Income Tax Appellate Tribunal, Indore Bench, dated 29 -1 -2002, by which the Tribunal has reviewed its own order passed four years prior to the review application and has changed its conclusions.

(2.) THE Income Tax Appellate Tribunal vide its order dated 27 -1 -2001, in appeal for the assessment year 1991 -92 allowed the appeal of the revenue after going through the law laid down in CIT v. Canara Workshops P. Ltd. : [1986]161ITR320(SC) as Section 80B(5) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'), was not on the statute. The revenue contends that before allowing deductions under Chapter VI -A, effect to all the provisions of the Act has to be given for determining the gross total income. The gross total income is defined in Section 80B(5) of the Act which reads as under : 'gross total income' means the total income computed in accordance with the provisions of this Act, before making any deduction under this Chapter.

(3.) SINCE the assessee was claiming deduction in accordance with Sections 4, 80HH and 80I of the Act on the gross total income, the department contends that it is only the residue of the income deducted in accordance with law that such a claim can be made. For better appreciation of the controversy, it would be useful to reproduce the provisions of Sections 80HH and 80I of the Act. Section 80I provides that : 80 -I(1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel, or the business of repairs to ocean -going vessels or other powered craft, to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to twenty per cent. thereof.