COMMISSIONER OF INCOME TAX Vs. TARUN UDYOG

JUDGEMENT

(1.) THE assessee is a partnership firm and it derived its income from manufacture and sale of charcoal. It was entitled to certain deduction under Section 80HH of the Income-tax Act, 1961 (hereinafter "the Act"). Though the deduction was allowed, the same was calculated on the profit earned by the assessee less the investment allowance allowed under Section 32A of the Act. THE Income-tax Officer rejected the contention of the assessee that, for granting deduction as contemplated by Section 80HH, the profit as reduced by allowing investment allowance was not the legal way to compute the same. On an appeal being preferred, the Appellate Assistant Commissioner rejected the case of the assessee. THE Tribunal, however, accepted the contention. At this, the Department felt aggrieved and, at its behest, the following question has been referred to this court for answer :

(2.) TO answer the aforesaid question, we may note Section 80HH(1) of, the Act: