J.K. Industries Ltd. v. Asstt. CIT

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The Tax Publishers2013 TaxPub(DT) 1362 (Karn-HC) : (2013) 051 (I) ITCL 0445 : (2013) 351 ITR 0434 : (2013) 260 CTR 0348 : (2013) 085 DTR 0225 Income Tax Act, 1961 --Deduction under section 80HHC--Computation Treatment of unabsorbed depreciation brought forward from prior years--Assessee claimed deduction under section 80HHC before adjusting for unabsorbed carried forward depreciation of earlier years. Assessing officer was of the view that unabsorbed depreciation and carried forward losses of the earlier year should be first factored in while arriving at the taxable income and as against balance available, the benefit of deduction under section 80HHC should have been claimed. *Held :* The benefit of section 80HHC can be claimed only as against total income of assessee for the current year as determined after allowing for the absorption of unabsorbed depreciation allowance of the earlier years against the profits of assessee for the year. Income Tax Act, 1961, Section 80HHC IN THE Karnataka High Court D.V. Shylendra Kumar & B. Sreenivase Gowda, J.J. J.K. Industries Ltd. v. Asstt. CIT IT Appeal No. 1105 of 2006 A.Y. 1997-98 19 February, 2013 Income-tax Act, 1961, ss. 80AB & 80HHC In favour of: Revenue Appellant by : A. Shankar Respondent by : E. R. Indra Kumar for E.I. Sanmathi JUDGMENT *D.V. Shylendra Kumar, J.* This appeal by the assessee under section 260A of the Income Tax Act, 1961 (for short the Act) in respect of the assessment year 1997-98 seeking for determination of the following substantial questions of law as arising out of the order of the Tribunal : '1. Whether on the facts of the case the Tribunal was justified in law in holding that the benefit of deduction under section 80HHC of the Act can be availed by the assessee only on the total income as computed after setting off the unabsorbed depreciation of the earlier years ? 2. Whether the method of computation of deduction under section 80HHC as approved by the Tribunal is valid in law on the facts of the present case ? 3. Whether on the facts and circumstances of the case, benefit of section 80HHC of the Act can be claimed on the total income after deduction of unabsorbed losses and unabsorbed depreciation or otherwise ?' 2. The assessee is a limited company and insofar as the present appeal is concerned, is aggrieved by the order of the Tribunal in taking the view that the Commissioner (Appeals) had committed an error in allowing the appeal of the assessee and to hold that the benefit of deduction claimed by the assessee under section 80HHC of the Act could not have been allowed before setting off the accumulated unabsorbed depreciation of the earlier years. 3. The brief facts insofar as the question in issue is concerned is that the assessee had export business and manufacturer of tyres and exports some part of its production. It is in respect of the export turnover, the assessee had put forth a claim for deduction from out of its assessable income under the provisions of section 80HHC of the Act. 4. The assessee had quantified the benefit available to the assessee under section 80HHC of the Act for the accounting period relevant for the assessment year in a sum of Rs. 7,52,92,016 and this amount had been reduced from its total taxable income for the year in question which was at a sum of Rs. 11,80,40,798. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 1362 (Karn-HC) : (2013) 051 (I) ITCL 0445 : (2013) 351 ITR 0434 : (2013) 260 CTR 0348 : (2013) 085 DTR 0225

Income Tax Act, 1961

--Deduction under section 80HHC--Computation Treatment of unabsorbed depreciation brought forward from prior years--Assessee claimed deduction under section 80HHC before adjusting for unabsorbed carried forward depreciation of earlier years. Assessing officer was of the view that unabsorbed depreciation and carried forward losses of the earlier year should be first factored in while arriving at the taxable income and as against balance available, the benefit of deduction under section 80HHC should have been claimed. Held : The benefit of section 80HHC can be claimed only as against total income of assessee for the current year as determined after allowing for the absorption of unabsorbed depreciation allowance of the earlier years against the profits of assessee for the year.

Income Tax Act, 1961, Section 80HHC

IN THE Karnataka High Court

D.V. Shylendra Kumar & B. Sreenivase Gowda, J.J.

J.K. Industries Ltd. v. Asstt. CIT

IT Appeal No. 1105 of 2006

A.Y. 1997-98

19 February, 2013

Income-tax Act, 1961, ss. 80AB & 80HHC In favour of: Revenue

Appellant by : A. Shankar

Respondent by : E. R. Indra Kumar for E.I. Sanmathi

JUDGMENT

D.V. Shylendra Kumar, J.

This appeal by the assessee under section 260A of the Income Tax Act, 1961 (for short the Act) in respect of the assessment year 1997-98 seeking for determination of the following substantial questions of law as arising out of the order of the Tribunal :

'1. Whether on the facts of the case the Tribunal was justified in law in holding that the benefit of deduction under section 80HHC of the Act can be availed by the assessee only on the total income as computed after setting off the unabsorbed depreciation of the earlier years ?

2. Whether the method of computation of deduction under section 80HHC as approved by the Tribunal is valid in law on the facts of the present case ?

3. Whether on the facts and circumstances of the case, benefit of section 80HHC of the Act can be claimed on the total income after deduction of unabsorbed losses and unabsorbed depreciation or otherwise ?'

2. The assessee is a limited company and insofar as the present appeal is concerned, is aggrieved by the order of the Tribunal in taking the view that the Commissioner (Appeals) had committed an error in allowing the appeal of the assessee and to hold that the benefit of deduction claimed by the assessee under section 80HHC of the Act could not have been allowed before setting off the accumulated unabsorbed depreciation of the earlier years.

3. The brief facts insofar as the question in issue is concerned is that the assessee had export business and manufacturer of tyres and exports some part of its production. It is in respect of the export turnover, the assessee had put forth a claim for deduction from out of its assessable income under the provisions of section 80HHC of the Act.

4. The assessee had quantified the benefit available to the assessee under section 80HHC of the Act for the accounting period relevant for the assessment year in a sum of Rs. 7,52,92,016 and this amount had been reduced from its total taxable income for the year in question which was at a sum of Rs. 11,80,40,798.