Harsiddh Specific Family Trust Vs ACIT (Gujarat High Court)
The Gujarat High Court decided a batch of tax appeals concerning the computation of deduction under Section 80-I of the Income-tax Act, 1961. The appeals had remained pending because the Supreme Court, by its order dated 21 August 2025, had set aside the High Court’s earlier decisions and remanded the matters for fresh consideration in light of its judgment in Vijay Industries Vs Commissioner of Income Tax, reported in (2019) 412 ITR 1 (SC).
The common question before the High Court was whether the Tribunal was justified in rejecting the assessee’s contention that deduction under Section 80-I should be allowed on the profits of the industrial undertaking without reducing the deduction claimed under Section 32AB of the Act.
The assessee was engaged in the manufacture of Nirma detergent cake. For the relevant assessment years, it filed original and revised returns claiming deduction under Section 32AB on account of deposits with IDBI and purchase of new plant and machinery in accordance with that provision. The assessee also claimed deduction under Section 80-I in respect of profits derived from its industrial undertaking.
The Assessing Officer disallowed the assessee’s claim under Section 80-I on the ground that similar claims had been disallowed in earlier assessment years because the conditions prescribed under Section 80-I(2) were not fulfilled. Since the entire claim under Section 80-I was rejected, the Assessing Officer did not examine the question of reducing the deduction under Section 32AB while computing deduction under Section 80-I.
