IN HIGH COURT OF JUDICATURE AT MADRAS DATE : 17.12.2014 CORAM HONOURABLE MR. JUSTICE R.SUDHAKAR AND HONOURABLE MR. JUSTICE R.KARUPPIAH T.C. NO. 666 OF 2007 Commissioner of Income Tax Coimbatore. .. Appellant - Vs - M/s. Rajshree Sugars & Chemicals Ltd. Uffizi 338, Avinashi Road, Peelamedu Coimbatore 641 004. .. Respondent Appeal filed under Section 260-A of Income Tax Act against order dated 17.11.06, passed by Income Tax Appellate Tribunal, Madras 'D' Bench, made in ITA No.1459/Mds/05. For Appellant : Mr. T.R. Senthil Kumar For Respondent : Mr. R.Vijayaraghavan for M/s. Subbaraya Aiyer JUDGMENT (DELIVERED BY R.SUDHAKAR, J.) Aggrieved by order of Appellate Tribunal in dismissing appeal filed by it, Revenue is before this Court challenging said order by filing present appeal and this Court, vide order dated 18.6.07, framed for following substantial questions of law for consideration :- 2 1) Whether on facts and in circumstances of case, Income Tax Tribunal is right in holding that deduction under 80I should be allowed on eligible profits without reducing deduction given under 80 HH for assessment year 1995-96? 2) Whether on facts and in circumstances of case, Income Tax Tribunal is right in holding that 80I deduction should be allowed without reducing deduction under 80HH even though interest on TDRs favouring TNPCB were not receipts arising in course of business nor were said income derived from industrial undertaking? 3) Whether on facts and in circumstances of case, Income Tax Tribunal is right in holding that for purpose of claiming deduction under 80 HH and 80I, while dealing with eligible profits, interest on term deposits, bank and interest on TDRs, are receipts derived from industrial undertaking? 2. Though this Court finds that this appeal has been admitted on above three questions of law, unfortunately, this Court finds that substantial questions of law (2) and (3) framed above are totally irrelevant to case on hand and has not been considered by Tribunal on matter of facts as well as on law. Therefore, substantial questions of law Nos. (2) and (3) are irrelevant and, therefore, it is not necessary to be answered. 3. Assessment for year 1995-96 was completed determining taxable income of Rs.8,03,97,980/= which was subsequently revised under Section 154 of Act. Certain incomes derived during current assessment year and earlier assessment year were not deducted and, thereby excessive deductions were allowed under Section 80 I and 80 IA and, therefore, to withdraw same, assessment was reopened under Section 147 by issuance of notice under Section 148. On appearance of assessee, after deliberations, 3 assessment was finalised. However, assessee not happy with income arrived at, filed appeal before CIT (Appeals), who confirmed certain portions of order of Assessing Officer, while on certain heads granted relief to assessee. 4. However, Department, aggrieved by said order, filed appeal before Income Tax Appellate Tribunal, which was dismissed following judgment of Madhya Pradesh High Court reported in 144 TAXMAN 176. Aggrieved by said order of Tribunal in dismissing appeal filed, Revenue is before this Court by filing present appeal. 5. Heard learned standing counsel appearing for appellant/Revenue and learned counsel appearing for respondent. 6. From perusal of order, it is evident that Tribunal granted benefit under Section 80 HHC and held that deduction under Section 80I to be made from gross total income before allowing admissible deduction under 80 HHC. issue raised in present case is whether benefit under Section 80I and 80HH could be taken together or whether benefit of deduction under Section 80I should be made and, thereafter, deduction under Section 80HH should be made. 7. Supreme Court in Joint Commissioner of Income Tax Vs Mandideep Eng. & Pkg. India (P) Ltd. (2007 (210) CTR 614 (SC)) approved several orders passed by various High Courts and held that Section 80 HH and 80 I of Income Tax Act are independent of each other and, therefore, new industrial undertakings can claim deduction under both sections on gross total income independently and approved decision of Madhya Pradesh High Court in J.P. Tobacco Products (P) Ltd. - Vs CIT (1997 140 CTR (MP) 329). 8. abovesaid ratio laid down by Supreme Court was followed by this Court in 4 DCIT Vs Chola Textiles (P) Ltd. (2008 (218) CTR (Mad) 123). 9. In light of law enunciated in decision of Supreme Court, referred supra, this appeal fails and same is dismissed, answering issue raised in favour of assessee and against department. However, there shall be no order as to costs. (R.S.J.) (R.K.J.) 17.12.2014 Index : Yes/No Internet : Yes/No GLN/sasi To 1. Income Tax Appellate Tribunal Madras 'D' Bench Chennai. 2. Commissioner of Income Tax Coimbatore. 5 R.SUDHAKAR, J. AND R.KARUPPIAH, J. GLN/sasi T.C. NO. 666 OF 2007 17.12.2014 Commissioner of Income-tax, Coimbatore v. M/s. Rajshree Sugars & Chemicals Ltd