Lucas TVS Limited Vs ACIT (Madras High Court)
The appellant, engaged in the manufacture and export of auto electrical components, filed its return of income for Assessment Year 2003–04 declaring a total income of Rs.32,95,32,630. The return was initially processed under Section 143(1) of the Income Tax Act, 1961, followed by scrutiny under Section 143(2). The Assessing Officer completed the assessment by determining the total income at Rs.33,49,43,070 and, among other adjustments, restricted the deduction claimed under Section 80HHC.
The assessee challenged the assessment before the Commissioner of Income Tax (Appeals), who partly allowed the appeal on 01.11.2006. Thereafter, both the Revenue and the assessee preferred appeals before the Income Tax Appellate Tribunal. The Tribunal, relying on the Special Bench decision in ACIT v. Rogini Garments [(2007) 294 ITR 15 (AT)(SB)], upheld the assessment by confirming the computation of deduction under Section 80IB first and thereafter computing the deduction under Section 80HHC.
The assessee filed a Tax Case Appeal before the Madras High Court raising the substantial question of law as to whether the Tribunal was correct in holding that the relief under Section 80IA should be deducted from the profits and gains of business before computing relief under Section 80HHC.
