High Court Of Madras
CIT vs. A. Rafeeq Ahmed & Co. & Anr.
Sections 35B, 80HH, 254
Asst. Year 1979-80
R. Jayasimha Babu & K. Gnanaprakasam, JJ.
TC Nos. 1446 to 1448 of 1985 & 1303 of 1987 & 779 of 1988
21st February, 2001
Mrs. Chitra Venkataraman, for the Revenue : P.P.S. Janarthana Raja, for the Assessee
R. JAYASIMHA BABU, J. :
For the asst. yr. 1979-80, two questions have been referred, the second of which is required to be answered against the assessee in the light of the decision of this Court in the case of K.V. Sasidhar vs. Assistant Director of Inspection (Investigation) (1996) 217 ITR 332 (sic). That question as to whether the assessee is entitled to weighted deduction under s. 35B, of the IT Act, 1961, in respect of packing credit is answered against the assessee.
2. So far as the first question regarding the eligibility of the assessee to claim the benefit of s. 80HH of the Act is concerned the Tribunal had, after finding that certain factors had not been properly appreciated by the assessing authority, sent the matter back to the ITO for a decision afresh in accordance with law. Subsequently without stating any other reason, it had modified the direction and mandated that the ITO should merely quantify the relief and not go through the exercise of determining whether the assessee is eligible for relief under s. 80HH of the Act. The Tribunal had not recorded a finding when it made the order under appeal that the assessee had established a new industrial undertaking. It merely pointed out what it regarded as an erroneous approach adopted by the ITO and concluded that the matter was required to be referred back to the ITO for a fresh decision. That direction was a perfectly proper one in the circumstances. The modification of that subsequently was not called for, and that direction is not supported by any reasons.
3. As to whether the Tribunal was justified in making the order on the rectification petition, is answered against the assessee by holding that the order made on the rectification petition was not an order which could have properly been made in the light of the findings recorded by the Tribunal in the appeal. We, therefore, hold that the assesseeâs eligibility to claim relief under s. 80HH of the Act would be dependent upon the finding by the ITO that the assessee had established a new industrial undertaking, and in order to enable the ITO as to whether or not such a new industrial undertaking had been established, the matter is remanded to the ITO.
[Citation : 251 ITR 557]