Commissioner Of Income Tax vs Flex Industries Ltd.
2002 Latest Caselaw 1792 Del

ORDER

1. This appeal under Section 260A of the IT Act, 1961 (for short the Act), is directed against the consolidated order, dt. 8th May, 2002, passed by the Tribunal, Delhi Bench-E, New Delhi in ITA Nos. 705, 706/Del/1995, pertaining to the asst. yrs. 1990-91 and 1991-92. By the impugned order, the Tribunal has held that deduction under Section 32A of the Act should not be considered while allowing deduction under Section 80-I of the Act.

2. Despite service, no one appears for the respondent-assessed.

3. Since, in our view, the issue arising for consideration in the present appeal is no longer res integra, we deem it unnecessary to state the facts.

In Motilal Pesticides (I)(P) Ltd v. CIT (2000) 243 ITR 26 (SC), the Supreme Court, while dealing with the question whether deduction under Section 80HH has to be allowed on net income or on gross income, having regard to the insertion of Sections 80AA and 80AB, has held that special deduction under Section 80HH is allowable only on the net income and not on the gross income as Section 80AB was enacted to declare the law as it always stood in relation to the deductions to be made in respect of the income specified under the head "C" of Chapter VI-A of the Act. In our view, the same principle would apply in respect of the deduction under Section 80-I of the Act.

4. In view of the said authoritative pronouncement, the aforenoted view taken by the Tribunal cannot be sustained. Accordingly, the appeal is allowed; the order of the Tribunal is set aside and that of the AO affirmed by the CIT.(A), is restored. The appeal stands disposed of with no order as to costs.