M/s. Indian Gum Industries Ltd. Vs JCIT (Bombay High Court)
Facts of the Case
For the previous year relevant to the subject Assessment year, the Appellant in its return of income claimed 100% deduction in respect of profits earned by the two new factories derived from its exports under Section 80HHC of the Act. Besides, the Appellant also claimed the benefits of deduction under the Section 80IA of the Act to the extent of 30% of the profits and gains derived from its two new factories at Ahmedabad. The aggregate of deductions claimed was less than its Gross Total Income as defined under Section 80B(5) of the Act. The Appellant in its return of income claimed benefits of Section 80HHC of the Act to the extent of its earning from exports. Thereafter it claimed deduction at 30% of its profits and gains under Section 80IA of the Act. This 30% deduction under Section 80IA of the Act was computed without deducting / excluding the deduction allowed under Section 80HHC of the Act on profits derived from exports by the two new units. However, the Assessing Officer did not accept the same, as he was of the view that the Appellant would be entitled to deduction under Section 80IA of the Act only on the profits and gains of the two units after deducting the amount availed of as deduction under Section 80HHC of the Act was claimed. The basis of the above conclusion was the reliance upon the decision of the Supreme Court in Escorts Ltd. v/s Union of India, 199 ITR 43,which dealt with the double claim for deduction under Section 32 and Section 35 of the Act. Thus, the Assessing Officer on the above basis by his order dated 31st August, 1999 restricted the claim to Rs.87.96 lakhs as against Rs.104.88 lakhs claimed under Section 80IA of the Act for Assessment Year 1997-98.
