RAJIV SHAKDHER - (1.) THE captioned appeal pertains to assessment year 1997-1998. THE revenue in this appeal has broadly raised several issues, even though the proposed question of laws are five in number. In so far as the first two issues are concerned in a connected appeal of the revenue being ITA No.1136/2007 we have already admitted the said appeal and framed questions of law which require adjudication. It is agreed by the learned counsels for the parties that the same questions of law can be framed in the captioned appeal as well.
(2.) THIS brings to fore the third issue which pertains to the claim of deduction by the assessee under section 80 HHC of the Income Tax Act, 1961 (in short, IT Act). The revenue has proposed a question of law for our consideration even with regard to this issue. In order to come to a conclusion either way, the following brief facts required to be noticed :- 3.1. The assessee runs and manages two units. Out of these two units, one unit is in the business of multimedia. In so far as the multimedia unit is concerned, the assessee has carried out exports as well. As far as the other unit is concerned, it is engaged in the manufacture of PET jars. This is a domestic unit. The assessee had claimed a deduction under section 80 HHC equivalent to Rs.1966.33 Lacs. The AO upon consideration of this aspect of the matter, came to the conclusion that in calculating the deduction under section 80 HHC, the assessee would be required to include the turnover of the entire business which would include the turnover not only of the multimedia unit but also that of the domestic unit. The Assessing Officer rejected the contention of the assessee despite the stand taken that two businesses were separate which were run through separate undertakings and involved maintenance of separate accounts including balance sheet and profit and loss account. The Assessing Officer in these circumstances concluded that the deduction under section 80 HHC was not available to the assessee.
(3.) AGGRIEVED by the order of the Assessing Officer, an appeal was preferred to the Commissioner of Income Tax [in short, CIT(A)]. Before the CIT (A), the assessee took the same stand. The assessee followed this up by filing a revised computation of its claim in which it took into consideration only the turnover and the profits of the multimedia business. The said computation also excluded the sale proceeds realized by the assessee after 30.09.1997 in respect of which extension was not granted by the CIT (A). As per this computation, the deduction claimed by the assessee worked out to Rs.6,79,10,169/-. After a detailed consideration, the CIT (A) accepted the claim of the assessee. 4.1 The revenue being aggrieved by the order passed by CIT (A), preferred an appeal with the Income Tax Appellate Tribunal (in short, the Tribunal). The Tribunal sustained the order of the CIT (A) by following its own decision dated 10.11.2003 passed in ITA No.845/Del/1999 pertaining to Assessment Year 1995-1996 in the case of DCIT Vs.PCL Enterprises. The Tribunal noted that the said decision relied upon the Madras High Court Judgment in the case of CIT Vs. Madras Motors Ltd. (2002) 257 ITR 60 (Mad.) and a decision of another bench of the Tribunal in the case of Kamaljeet Vs. ITA No.1110/Del/98 dated 29.07.2003.;