- (1.) Both the appeals are being decided together since it involves the same questions of law. For facility, the facts in Income Tax Appeal No. 734 of 2007 is being taken into consideration.
(2.) The assessee is a manufacturer and exporter. For the assessment year 2001-02, the assessee filed his return showing nil income claiming deductions under Sections 80HHC and 80-IB of the Income Tax Act,1961 (hereinafter referred to as the Act). The return of income was processed under Section 143(1) of the Act and a notice under Section 142(1) of the Act was issued. The computation of total income was checked and the deduction claimed under Sections 80HHC and 80-IB of the Act was scrutinized. The assessing authority, accordingly, computed the total income at nil after allowing deductions under Sections 80-IB and 80HHC of the Act. The Assessing Officer concluded as under: "In response to discussion during the assessment proceedings, the assessee has filed the copies of Balance Sheet & Profit & Loss Account for the period ending 31/03/1992 and it is found that this firm was not constituted after splitting up the old business. The assessee was specifically asked when this firm was entitled for deduction u/s 80 IB since its establishment, then why it did not claim deduction u/s 80 IB prior to this year. In response to this, the assessee has submitted that in earlier years, there was 100% deduction u/s 80HHC of I.T.Act, 1961 and no income was left liable for assessment and this, it did not claim u/s 80IB of I.T.Act, 1961 in earlier year. On going through all the documents submitted and produced, it is seen that assessee qualifies for deduction u/s 80IB as per proviso (I) of sub-section (3) of section 80IB of I.T.Act, 1961. In view of above discussion, the deduction u/s 80IB of I.T.Act, 1961 is therefore allowed and A.Y. 1992-93 is the initial assessment year. In view of above observations, total income is computed as under: JUDGEMENT_358_LAWS(ALL)12_2015.html Assessment is completed on total income at NIL. Tax payable works out at NIL. Allow credit of Rs. 35,00,000/-. Allowed interest u/s 244(A) of I.T.Act, 1961. Issue copy of the order, ND & refund voucher to the assessee. Tax refundable comes as under- JUDGEMENT_358_LAWS(ALL)12_2015(1).html
(3.) From the aforesaid, it is clear that the deductions under Sections 80-IB and 80 HHC of the Act was given from the profits and gains computed at Rs. 3,49,13,594.00. The computation further indicates that the Assessing Authority granted deductions upto a maximum of 100% of the profits and gains as provided under Section 80-IA(9) of the Act.;