Law:

Section:

Section 80-I of the Income-tax Act, 1961 - Deductions - Profits and gains of industrial undertakings, etc., after certain dates - Whether for purpose of relief under section 80-I sum representing development rebate and relief under section 35B that had been allowed to assessee in assessment was to be excluded - Held, yes FACTS The assessee was engaged in the manufacture and sale of hand tools. It declared a net profit and claimed relief under section 80-I. The ITO made certain adjustments while arriving at the figure on which deduction under section 80-I was admissible. On appeal, the AAC held that relief was to be worked out on the assessed income and not on the book profits. The question which posed before the Tribunal was whether the relief was to be allowed under section 80-I on the assessed income or on that income as enhanced by the claim of the assessee relating to development rebate and weighted expenditure on exports under section 35B. Following its decision for the earlier year, the Tribunal held that the decision of the AAC was correct. On reference: HELD In view of the decision of Supreme Court in Cambay Electric Supply Industrial Co. Ltd. v. CIT[1978] 113 ITR 84 it was to be held in the instant case that the Tribunal was correct in excluding for the purposes of relief under section 80-I the sum representing the development rebate and relief under section 35B that had been allowed to the assessee in the assessment. Note: The decision is in favour of the revenue. CASE REVIEW Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84 (SC) and CIT v. Marshall Sons and Co. Mfg. Ltd. [1989] 180 ITR 66 (Mad)followed and relied upon. Deepak Chopra for the Applicant. Rajendra, R.C. Pandey and R.K. Chaufla for the Respondent. JUDGMENT B.N. Kirpal, J.-The Income-tax Appellate Tribunal has referred to this court the following question of law for its opinion: "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in excluding for the purposes of relief under section 80-I of the Income-tax Act, 1961, the sum of Rs. 2,19,617 and Rs. 12,549 representing the development rebate and relief under section 35B that had been…

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