Dr. Satish Chandra, J. - (1.) THE present appeal is filed by the assessee against the order dated 29.07.2004 passed by the Income Tax Appellate Tribunal, Agra in ITA No. 195/Agra/2000 for the assessment year 1997 -98.
(2.) ON 27.01.2005, a Coordinate Bench has admitted the appeal on the following substantial question of law : 1. Whether deduction under Section 80 -I(IA) is to be computed on the gross total income derived from business of Industrial undertaking without deducting the amount of deduction under Section 80HHC or? 2. Whether the Assessing Officer while examining the return submitted by the assessee, is liable to or empower to grant correct amount of deduction to the assessee to which she is entitled to in law even if by omission or otherwise it has not been so claimed in the return income, submitted by her? The brief facts of the case are that during the assessment year under consideration, the assessee has derived income from industrial activities being mining and was also engaged in export business. The assessee also derived income from other sources. Separate books were maintained for mining business, which were duly audited and certificate was furnished in prescribed form relating to income derived from the said activity. Net profit from mining was disclosed at Rs. 2,21,42,903/ -. After depreciation the net profit worked out to Rs. 1,67,89,357/ -. The assessee has shown the net profit of Rs. 7,57,130/ -. In the return, the assessee has claimed the deduction under Section 80HHC and under Section 80IA of the Act and while computing the deduction under Section 80IA, the assessee has first claimed the deduction on account of Section 80HHC and it was on the basis of the balance that the deduction under Section 80IA was claimed. The return was processed under Section 143(1)(a) on 12.3.1998.
(3.) LATER on, the A.O. came to know that the assessee was not entitled to deduction under Section 80HHC on the income earned from hiring charges of pock lane machine and, therefore, he rectified the intimation as per order dated 14th October, 1998 and the deduction under Section 80HHC was reduced accordingly. The deduction under Section 80IA was reduced consequently. Being aggrieved, the assessee has moved an application under Section 154 of the Act, which was rejected by the A.O. by following the ratio laid down in the case of Combay Electric Supply Industrial Co. Ltd. Vs. CIT : (1978) 113 ITR 84 SC. However, the CIT(A) has allowed the claim of the assessee, but the Tribunal has refused to grant any relief to the assessee. The Tribunal has restored the order passed by the A.O. Being aggrieved, the assessee has filed the present appeal.;