JUDGMENT judgment of court was delivered by S. Ravindra Bhat J.-The question of law framed in this case by order dated September 22, 2000, is as follows: "Whether assessee is entitled to deduction/benefit under section 80-I on gross income without excluding/reducing deduction allowed under section 80HH?" facts necessary for deciding this appeal under section 260A of Income-tax Act, 1961, are that for period January 1, 1988, to March 31, 1989, relevant for assessment year 1989-90, return of income was filed by respondent-assessee declaring Rs. 53,93,390 as income. assessee manufactured and sold rubber patches for tyre, tubes, uniseals, etc. By order dated March 13, 1992, Assessing Officer, inter alia, held that deduction under section 80-I could be allowed on balance amount of income after it suffers deduction under section 80HH. This view was reversed by Commissioner of Income-tax (Appeals) who was of opinion that both sections, i.e., sections 80HH and 80-I were independent provisions and, consequently, assessee was entitled to deduction under section 80-I on total amount without it having suffered any deduction under section 80HH. Revenue unsuccessfully appealed to Income-tax Appellate Tribunal and, consequently, has approached this court. It is argued on behalf of Revenue that Income-tax Appellate Tribunal as well as Commissioner of Income- tax (Appeals) completely overlooked section 80HH(9) which is in imperative terms and stipulates expressly that before benefit of section 80-I could be claimed, or some other benefit-under section 80J, could be claimed-the total profits had to be deducted in manner provided in section, i.e., in terms of section 80HH and section 80-I. submission of Revenue in this regard may be noticed by its contention in grounds of appeal to following effect : "The language of section 80HH(9) is clear and specifically stipulates that where assessee is entitled to deduction under section 80HH and 80-I, assessee is first entitled to deduction under section 80HH and, thereafter, deduction will be allowed under section 80-I." Commissioner of Income-tax (Appeals) reasoned that deduction under section 80-I and section 80HH had to be with reference to gross total income independent to one another, relying on language with reference to section 80-I. Income-tax Appellate Tribunal apparently endorsed this opinion in following terms: "The next grievance is against direction of learned Commissioner of Income-tax (Appeals) to allow deduction under section 80-I on same income on which deduction under section 80HH has been allowed, i.e., on gross income. assessee claimed deductions under section 80HH and section 80-I on gross income. issue is covered by order dated November 5, 1996, of Delhi Bench'B' in I. T. A. No. 5730/Del/91 in assessee's own case. Reliance on orders of Karnataka High Court and Allahabad High Court reported in CIT v. H.M.T. Ltd. (No. 1) [1993] 203 ITR 811 (Karn) and 140 ITR 745 have been placed. Income-tax Appellate Tribunal had held in assessment year 1988-89 in this very case that deduction under section 80-I must be allowed without taking into account other deductions permissible under Chapter VI of Act. Thus, relief under section 80HH and section 80-I were admissible on gross income. Following order of Income-tax Appellate Tribunal we dismiss Revenue's ground." relevant provisions are as follows: "80HH. (1) Where gross total income of assessee includes any profits and gains derived from industrial undertaking, or business of hotel, to which this section applies, there shall, in accordance with and subject to provisions of this section, be allowed, in computing total income of assessee, deduction from such profits and gains of amount equal to twenty per cent. thereof. 80HH.(9) In case where assessee is entitled also to deduction under section 80-I or section 80J in relation to profits and gains of industrial undertaking or business of hotel to which this section applies, effect shall first be given to provisions of this section. 80-I. Deduction in respect of profits and gains from industrial undertakings after certain date, etc.-(1) Where gross total income of assessee includes any profits and gains derived from industrial undertaking or ship or business of hotel or business of repairs to ocean-going vessels or other powered craft, to which this section applies, there shall, in accordance with and subject to provisions of this section, be allowed, in computing total income of assessee, deduction from such profits and gains of amount equal to twenty per cent. thereof: Provided that in case of assessee, being company, provisions of this sub-section shall have effect in relation to profits and gains derived from industrial undertaking or ship or business of hotel as if for words'twenty per cent.', words'twenty-five per cent.' had been substituted. (1A) Notwithstanding anything contained in sub-section (1), in relation to any profits and gains derived by assessee from- (i) industrial undertaking which begins to manufacture or produce articles or things or to operate its cold storage plant or plants; or (ii) ship which is first brought into use; or (iii) business of hotel which starts functioning, on or after 1st day of April, 1990, but before 1st day of April, 1991, there shall, in accordance with and subject to provisions of this section, be allowed in computing total income of assessee, deduction from such profits and gains of amount equal to twenty-five per cent. thereof: Provided that in case of assessee, being company, provisions of this sub-section shall have effect in relation to profits and gains derived from industrial undertaking or ship or business of hotel as if for words'twenty-five per cent.', words'thirty per cent.' had been substituted. (2) This section applies to any industrial undertaking which fulfils all following conditions, namely:- (i) it is not formed by splitting up, or reconstruction, of business already in existence; (ii) it is not formed by transfer to new business of machinery or plant previously used for any purpose; (iii) it manufactures or produces any article or thing, not being any article or thing specified in list in Eleventh Schedule, or operates one or more cold storage plant or plants, in any part of India, and begins to manufacture or produce articles or things or to operate such plant or plants, at any time within period of ten years next following 31st day of March, 1981, or such further period as Central Government may, by notification in Official Gazette, specify with reference to any particular industrial undertaking; (iv) in case where industrial undertaking manufactures or produces articles or things, undertaking employs ten or more workers in manufacturing process carried on with aid of power, or employs twenty or more workers in manufacturing process carried on without aid of power: Provided that condition in clause (i) shall not apply in respect of any industrial undertaking which is formed as result of reestablishment, reconstruction or revival by assessee of business of any such industrial undertaking as is referred to in section 33B, in circumstances and within period specified in that section: Provided further that condition in clause (iii) shall, in relation to small- scale industrial undertaking, apply as if words'not being any article or thing specified in list in Eleventh Schedule' had been omitted. Explanation 1.-For purposes of clause (ii) of this sub-section, any machinery or plant which was used outside India by any person other than assessee shall not be regarded as machinery or plant previously used for any purpose, if following conditions are fulfilled, namely:- (a) such machinery or plant was not, at any time previous to date of installation by assessee, used in India; (b) such machinery or plant is imported into India from any country outside India; and imported into India from any country outside India; and (c) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under provisions of this Act in computing total income of any person for any period prior to date of installation of machinery or plant by assessee. Explanation 2.-Where in case of industrial undertaking, any machinery or plant or any part thereof previously used for any purpose is transferred to new business and total value of machinery or plant or part so transferred does not exceed twenty per cent. of total value of machinery or plant used in business, then, for purposes of clause (ii) of this sub-section, condition specified therein shall be deemed to have been complied with. Explanation 3.-For purposes of this sub-section,'small scale industrial undertaking' shall have same meaning as in clause (b) of Explanation below sub-section (8) of section 80HHA. (3) This section applies to any ship, where all following conditions are fulfilled, namely:- (i) it is owned by Indian company and is wholly used for purposes of business carried on by it; (ii) it was not, previous to date of its acquisition by Indian company, owned or used in Indian territorial waters by person resident in India; and (iii) it is brought into use by Indian company at any time within period of ten years next following 1st day of April, 1981. (4) This section applies to business of any hotel, where all following conditions are fulfilled, namely:- (i) business of hotel is not formed by splitting up, or reconstruction, of business already in existence or by transfer to new business of building previously used as hotel or of any machinery or plant previously used for any purpose; (ii) business of hotel is owned and carried on by company registered in India with paid-up capital of not less than five hundred thousand rupees; (iii) hotel is for time being approved for purposes of this sub- section by Central Government; (iv) business of hotel starts functioning after 31st day of March, 1981, but before 1st day of April 1991. (4A) This section applies to business of repairs to oceangoing vessels or other powered craft which fulfils all following conditions, namely:- (i) business is not formed by splitting up, or reconstruction, of business already in existence; (ii) it is not formed by transfer to new business of machinery or plant previously used for any purpose; (iii) it is carried on by Indian company and work by way of repairs to ocean-going vessels or other powered craft has been commenced by such company after 31st day of March, 1983, but before 1st day of April, 1988; and (iv) it is for time being approved for purposes of this subsection by Central Government. (5) deduction specified in sub-section (1) shall be allowed in computing total income in respect of assessment year relevant to previous year in which industrial undertaking begins to manufacture or produce articles or things, or to operate its cold storage plant or plants or ship is first brought into use or business of hotel starts functioning or company commences work by way of repairs to ocean-going vessels or other powered craft (such assessment year being hereafter in this section referred to as initial assessment year) and each of seven assessment years immediately succeeding initial assessment year: Provided that in case of assessee, being co-operative society, provisions of this sub-section shall have effect as if for words'seven assessment years', words'nine assessment years' had been substituted: Provided further that in case of assessee carrying on business of repairs to ocean-going vessels or other powered craft, provisions of this sub-section shall have effect as if for words 'seven assessment years', words'four assessment years' had been substituted: Provided also that in case of- (i) industrial undertaking which begins to manufacture or produce articles or things or to operate its cold storage plant or plants; or (ii) ship which is first brought into use; or (iii) business of hotel which starts functioning, on or after 1st day of April, 1990, but before 1st day of April, 1991, provisions of this sub-section shall have effect as if for words'seven assessment years', words'nine assessment years' had been substituted: Provided also that in case of assessee, being co-operative society, deriving profits and gains from industrial undertaking or ship or hotel referred to in third proviso, provisions of that proviso shall have effect as if for words'nine assessment years', words'eleven assessment years' had been substituted. (6) Notwithstanding anything contained in any other provision of this Act, profits and gains of industrial undertaking or ship or business of hotel or business of repairs to ocean-going vessels or other powered craft to which provisions of sub-section (1) apply shall, for purposes of determining quantum of deduction under sub-section (1) for assessment year immediately succeeding initial assessment year or any subsequent assessment year, be computed as if such industrial undertaking or ship or business of hotel or business of repairs to ocean-going vessels or other powered craft were only source of income of assessee during previous years relevant to initial assessment year and to every subsequent assessment year up to and including assessment year for which determination is to be made. (7) Where assessee is person other than company or cooperative society, deduction under sub-section (1) from profits and gains derived from industrial undertaking shall not be admissible unless accounts of industrial undertaking for previous year relevant to assessment year for which deduction is claimed have been audited by accountant, as defined in Explanation below sub-section (2) of section 288, and assessee furnishes, along with his return of income, report of such audit in prescribed form duly signed and verified by such accountant. (8) Where any goods held for purposes of business of industrial undertaking or hotel or operation of ship or business of repairs to ocean-going vessels or other powered craft are transferred to any other business carried on by assessee, or where any goods held for purposes of any other business carried on by assessee are transferred to business of industrial undertaking or hotel or operation of ship or business of repairs to ocean-going vessels or other powered craft and, in either case, consideration, if any, for such transfer as recorded in accounts of business of industrial undertaking or hotel or operation of ship or business of repairs to ocean-going vessels or other powered craft does not correspond to market value of such goods as on date of transfer, then, for purposes of deduction under this section, profits and gains of industrial undertaking or business of hotel or operation of ship or business of repairs to ocean-going vessels or other powered craft shall be computed as if transfer, in either case, had been made at market value of such goods as on that date: Provided that where, in opinion of Assessing Officer, computation of profits and gains of industrial undertaking or business of hotel or operation of ship or business of repairs to ocean-going vessels or other powered craft in manner hereinbefore specified presents exceptional difficulties, Assessing Officer may compute such profits and gains on such reasonable basis as he may deem fit. Explanation.-In this sub-section,'market value', in relation to any goods, means price that such goods would ordinarily fetch on sale in open market. (9) Where it appears to Assessing Officer that, owing to close connection between assessee carrying on business of industrial undertaking or hotel or operation of ship or business of repairs to ocean-going vessels or other powered craft to which this section applies and any other person, or for any other reason, course of business between them is so arranged that business transacted between them produces to assessee more than ordinary profits which might be expected to arise in business of industrial undertaking or hotel or operation of ship or business of repairs to ocean-going vessels or other powered craft, Assessing Officer shall, in computing profits and gains of industrial undertaking or hotel or ship or business of repairs to ocean-going vessels or other powered craft for purposes of deduction under this section, take amount of profits as may be reasonably deemed to have been derived therefrom. (10) Central Government may, after making such inquiry as it may think fit, direct, by notification in Official Gazette, that exemption conferred by this section shall not apply to any class of industrial undertakings with effect from such date as it may specify in notification." This court notices that question of law framed has now been answered in series of decisions. In first case, i.e., J. P. Tobacco Products Pvt. Ltd v. CIT [1998] 229 ITR 123 (MP), Madhya Pradesh High Court, after noticing that sub-section (9) of section 80HH was amended by Act No. 30 of 1981, nevertheless, in relation to assessment year 1985-86, proceeded to hold that benefits under section 80HH and section 80-I were independent and, consequently, there was no question of giving effect to section 80HH(9) and, thereafter, proceeding to bring balance amount for purposes of tax or benefit under section 80-I. view in J. P. Tobacco (supra) was followed by several other High Courts, i.e., Gujarat High Court, Allahabad High Court, Rajasthan High Court, Punjab and Haryana High Court and even by Division Bench of this court (in CIT v. S. K. G. Engineering Pvt. Ltd. [2006] 285 ITR 423 (Delhi)). Ultimately, this view was affirmed by Supreme Court in Joint CIT v. Mandideep Eng. and Pkg. Ind. Pvt. Ltd. [2007] 292 ITR 1 (SC). relevant part of discussion by Supreme Court is as follows (page 2): "The Madhya Pradesh High Court in J. P. Tobacco Products P. Ltd. v. CIT reported in [1998] 229 ITR 123 took view that both sections are independent and, therefore, deductions could be claimed both under sections 80HH and 80-I on gross total income. Against this judgment special leave petition was filed in this court which was dismissed on ground of delay on July 21, 2000 (see [2000] 245 ITR (St.) 71). decision in J. P. Tobacco Products P. Ltd. [1998] 229 ITR 123 (MP) was followed by same High Court in case of CIT v. Alpine Solvex P. Ltd. in I. T. A. No. 92 of 1999 decided on May 2, 2000. Special leave petition against this decision was dismissed by this court on January 12, 2001, (see [2001] 247 ITR (St.) 36). This view has been followed repeatedly by different High Courts in number of cases against which no special leave petitions were filed meaning thereby that Department has accepted view taken in these judgments. See CIT v. Nima Specific Family Trust reported in [2001] 248 ITR 29 (Bom); CIT v. Chokshi Contacts P. Ltd. [2001] 251 ITR 587 (Raj); CIT v. Amod Stamping [2005] 274 ITR 176 (Guj); CIT v. Mittal Appliances P. Ltd. [2004] 270 ITR 65 (MP); CIT v. Rochiram and Sons [2004] 271 ITR 444 (Raj); CIT v. Prakash Chandra Basant Kumar [2005] 276 ITR 664 (MP); CIT v. S.B. Oil Industries P. Ltd. [2005] 274 ITR 495 (P&H); CIT v. S. K. G. Engineering P. Ltd. [2005] 119 DLT 673 [2006] 285 ITR 423 (Delhi) and CIT v. Lucky Laboratories Ltd. [2006] 200 CTR 305 (All); [2006] 284 ITR 435 (All). Since special leave petitions filed against judgment of Madhya Pradesh High Court have been dismissed and Department has not filed special leave petitions against judgments of different High Courts following view taken by Madhya Pradesh High Court, we do not find any merit in this appeal. Department having accepted view taken in those judgments cannot be permitted to take contrary view in present case involving same point. Accordingly, civil appeal is dismissed. No costs." In view of above position in law, question of law framed in this appeal is answered in terms of law declared by Supreme Court in Mandideep Engineering and Packaging Ind. Pvt. Ltd. (supra) and against Revenue. appeal is accordingly dismissed. *** Commissioner of Income-tax v. Unipatch Rubber Ltd