sec 80HHC- Taxation Laws (2nd Amendment) Act, 2005 have prospective effect

Brief of the case:

Madras High Court held in CIT V/s Ms Orient Express that the amendment to sec 80HHC would have prospective effect from 2005 not retrospective effect.

Facts of the case:

The assessee was engaged in the manufacturing business of Leather and leather garments and claimed deduction u/s 80HHC for A.Y 1999-2000 but AO denied the same on the basis that the amended provisions of sec 80HHC of IT Act which would have retrospective effect had not been fulfilled.

Contention of the assessee:

Assessee was of the view that all the conditions were fulfilled so it was eligible to deduction u/s 80HHC, so the deduction should be allowed to it.

Contention of the revenue:

Revenue was of the contention that the amended provisions of 3^rd proviso to sec 80HHC had not been fulfilled which was amended in 2005 by the Taxation Laws (Second Amendment) Act, 2005 so the deduction should not be allowed to assessee.

Held by High Court:

High Court was of the view that in the case of “ Commissioner of Income Tax V. Avani Exports reported in [2015] 58 taxmann.com 100 (SC) it was held that the amended provisions to sec 80HHC would have prospective effect not retrospective effect ,So the above case was related with the A.Y 1999-2000 & 2003-04 and the provisions were amended in 2005 so the amended provisions would not be applicable on the above case.