CIT Vs Mohan Breweries And Distilleries Ltd (Madras High Court)
The Madras High Court heard a tax case appeal concerning the assessment year 2004–05, arising from an order of the Income Tax Appellate Tribunal (ITAT). The appeal involved three substantial questions of law admitted earlier, centering on the interaction between deductions claimed under Sections 80-IA and 80-HHC of the Income Tax Act, 1961, and the validity of a revisionary order passed under Section 263.
The Revenue contended that the ITAT erred in allowing deduction under Section 80-HHC without reducing the deduction already granted under Section 80-IA, as mandated by sub-section (9) of Section 80-IA. It was also argued that the ITAT failed to follow an earlier judgment of the Madras High Court which had interpreted Section 80-IA(9) as requiring such reduction. Further, the Revenue questioned the ITAT’s decision to quash the Commissioner’s order passed under Section 263 of the Act.
Both parties agreed before the High Court that the controversy was squarely covered by subsequent judgments of the Supreme Court on the same issue. Reference was made to the Supreme Court’s decision in Shital Fibres Ltd. v. CIT, which dealt with the concurrent availability of deductions under Sections 80-IA and 80-HHC. The issue had also been examined by a larger Bench of the Supreme Court in Assistant Commissioner of Income Tax v. Micro Labs Limited.
