RAJESH BINDAL, J. - (1.) TRIBUNAL , Chandigarh Bench (for short, "the Tribunal") in ITA No. 614/Chd/1984, for the asst. yr. 1978 -79, raising the following substantial question of law : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing deduction under s. 80J and investment allowance of the current year before allowing depreciation of the current year -
(2.) A perusal of the order passed by the learned Commissioner of Income -tax (Appeals), Jalandhar [for short, "the CIT (A)"] shows that the issue involved in the present case, in fact, is as to whether the AO had erred in law in allowing reference under s. 80J of the IT Act, 1961 (for short, "the Act") before allowing of difference. However, subsequently it was recorded as relief under s. 80J and investment allowance of the current year before allowing depreciation of the current year. Accordingly, we deem it appropriate to reframe the question of law which shall read as under : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing deduction under s. 80J of the current year before allowing depreciation and investment allowance of the current year -
(3.) THE assessee in the present case is engaged in the business of spinning of cotton, staple and polyester viscose yarn. income at Rs. 1,02,77,871. During the course of assessment proceedings, the AO did not allow the relief under s. 80J of the Act before the allowance of depreciation. However, the CIT(A) accepted the claim made by the assessee and directed that the relief under s. 80J of the Act and the investment allowance of the current year should be allowed before allowing depreciation for the current year. The order was upheld by the Tribunal in appeal by the Revenue. Learned counsel for the Revenue submitted that the view expressed by the Tribunal is totally contrary to the provisions of law as ss. 80AB and 80B(5) of the Act clearly provide for the manner in which the deduction under Chapter VI -A are to be calculated. He submitted that deduction under s. 80J of the Act is to be calculated on the net income after grant of all other deductions under the Act except provided under Chapter VI -A of the Act of which s. 80J is a part.;