SCM Creations vs Assistant Commissioner of Income Tax

K. Raviraja Pandian, J.—The two appeals are filed by the assessee relating to the asst. year. 2002-03 and 2003-04. The assessee is a

partnership firm engaged in the business of manufacture and export of hosiery garments.

The issue involved in these two appeals are whether the relief u/s 80-IA should be deducted from profits and gains of business before computing

relief u/s 80HHC.

The Counsel on either side submits that the issue had to be decided in favour of the assessee, as this Court already, by following the decision of

Commissioner of Income Tax Vs. V. Chinnapandi, , has decided the issue in favour of the assessee in Tax Case No. 344 of 2004 reported as Dy.

CIT v. Chola Textiles (P) Ltd. (2008) 218 CTR (Mad) 123-Ed., wherein this Court has held as follows:

It is submitted across the Bar by the learned Counsel appearing for either side that the very issue has been considered and held against the

Revenue by the Madhya Pradesh High Court in the case of J.P. Tobacco Products Pvt. Ltd. Vs. Commissioner of Income Tax, . It has also been

further submitted that the Bombay High Court also has taken the same view in the case of The Commissioner of Income Tax Vs. NIMA Specific

Family Trust, . The judgment of the Madhya Pradesh High Court has been taken to the Supreme Court and the Supreme Court in (2007) 107 ITD

327 , has rejected the SLP by giving the following reasons:

The Madhya Pradesh High Court in J.P. Tobacco Products Pvt. Ltd. Vs. Commissioner of Income Tax, took the view that both the sections

are independent and, therefore, the deductions could be claimed both u/s 80HH and 80-IA on the gross total income. Against this judgment, a

SLP was filed in this Court which was dismissed on the ground of delay on 21st July, 2000 [see (2000) 245 ITR 71]. The decision in J.P.

Tobacco Products (P) Ltd. v. CIT (supra) was followed by the same High Court in the case of CIT v. Alpine Solvex (P) Ltd. in IT Appeal No.

92 of 1999 decided on 2nd May, 2000. SLP against this was dismissed by this Court on 12th Jan., 2001 [see Federation of Andhra Pradesh

Chambers of Commerce and Industry and Others Vs. State of Andhra Pradesh and Others, ]. This view has been followed repeatedly by different

High Court in a number of cases against which no special leave petitions were filed meaning thereby that the Department has accepted the view

taken in these judgments. See The Commissioner of Income Tax Vs. NIMA Specific Family Trust, ; Commissioner of Income Tax, Jodhpur Vs.

M/s. Chokshi Contacts (P) Ltd. Udaipur, ; Commissioner of Income Tax Vs. Amod Stamping, ; Commissioner of Income Tax Vs. Mittal

Appliances and Others, ; Commissioner of Income Tax Vs. Rochi Ram and Sons, ; Commissioner of Income Tax Vs. Prakash Chandra Basant

Kumar, ; Commissioner of Income Tax Vs. S.B. Oil Industries Pvt. Ltd., ; The Commissioner of the Income Tax-III Vs. S.K.G. Engineering Pvt.

Ltd., and CIT v. Lucky Laboratories Ltd. (2006) 200 CTR (All) 305.

Since the special leave petitions filed against the judgment of the Madhya Pradesh High Court have been dismissed and the Department has not

filed the special leave petitions against the judgments of different High Court following the view taken by the Madhya Pradesh High Court, we do

not find any merit in this appeal. The Department having accepted the view taken in those judgments cannot be permitted to take a contrary view in

the present case involving the same point. Accordingly, the civil appeal is dismissed. No costs.

Following the same, the appeals are allowed to the extent indicated above. Consequently, connected miscellaneous petitions are closed. No

costs.