Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax - Court Judgment

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			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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1. in the circumstances and facts of our case, the learned cit(a) has erred in: (a) sustaining deduction under section 80hhc at rs. 26,67,213 instead of giving necessary direction to the ao to allow the duly claimed deduction under section 80hhc at rs. 38,07,772 by resorting to the provision of section 80-ia(9) despite the fact that the provisions of section 80hhc and section 80-ia are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income. (b) sustaining non-eligibility in respect of scrap sale of rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under section 80-ia.2. the ground no. 1(b).....

Judgment:

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			'appellant' => 'Leben Laboratories Ltd.',
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			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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	'Judgement' => array(
		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
			'acts' => null,
			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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	'Judgement' => array(
		'id' => '75245',
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		'appealno' => null,
		'appellant' => 'Leben Laboratories Ltd.',
		'authreffered' => null,
		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
		'court_type' => 'TRI',
		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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(b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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			'id' => '75245',
			'acts' => null,
			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
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			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
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			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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	'Judgement' => array(
		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
		'court_type' => 'TRI',
		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
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			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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	'Judgement' => array(
		'id' => '75245',
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		'appealno' => null,
		'appellant' => 'Leben Laboratories Ltd.',
		'authreffered' => null,
		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
		'court_type' => 'TRI',
		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.

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			'id' => '75245',
			'acts' => null,
			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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			'decidedon' => '2006-09-29',
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			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
			'acts' => null,
			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'caseanalysis' => '',
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			'counselplain' => null,
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
		'court_type' => 'TRI',
		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
			'acts' => null,
			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'caseanalysis' => '',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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	'Judgement' => array(
		'id' => '75245',
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		'appealno' => null,
		'appellant' => 'Leben Laboratories Ltd.',
		'authreffered' => null,
		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
		'court_type' => 'TRI',
		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.

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			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'caseanalysis' => '',
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			'counselplain' => null,
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
			'deposition' => null,
			'favorof' => '',
			'findings' => '',
			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
			'acts' => null,
			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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	'Judgement' => array(
		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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There is no room for any intendment. There is no equity about a tax.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
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			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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	'Judgement' => array(
		'id' => '75245',
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		'appealno' => null,
		'appellant' => 'Leben Laboratories Ltd.',
		'authreffered' => null,
		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
		'court_type' => 'TRI',
		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.

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			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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		'circuit' => null
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
			'acts' => null,
			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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			'id' => '75245',
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			'appellant' => 'Leben Laboratories Ltd.',
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			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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	'Judgement' => array(
		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
		'court_type' => 'TRI',
		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
			'acts' => null,
			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'caseanalysis' => '',
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			'counselplain' => null,
			'counseldef' => null,
			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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			'id' => '75245',
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			'appellant' => 'Leben Laboratories Ltd.',
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			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
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			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
		'court_type' => 'TRI',
		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
			'acts' => null,
			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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	'Judgement' => array(
		'id' => '75245',
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		'appealno' => null,
		'appellant' => 'Leben Laboratories Ltd.',
		'authreffered' => null,
		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
		'court_type' => 'TRI',
		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning & Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.

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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing & Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
			'acts' => null,
			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
			'acts' => null,
			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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	'Judgement' => array(
		'id' => '75245',
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		'appealno' => null,
		'appellant' => 'Leben Laboratories Ltd.',
		'authreffered' => null,
		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
		'court_type' => 'TRI',
		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.

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Code Context
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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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			'appellant' => 'Leben Laboratories Ltd.',
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			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
			'acts' => null,
			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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	'Judgement' => array(
		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
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			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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	'Judgement' => array(
		'id' => '75245',
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		'appealno' => null,
		'appellant' => 'Leben Laboratories Ltd.',
		'authreffered' => null,
		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
		'court_type' => 'TRI',
		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.

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			'appellant' => 'Leben Laboratories Ltd.',
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			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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		'appellant' => 'Leben Laboratories Ltd.',
		'authreffered' => null,
		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
		'casenote' => '',
		'caseanalysis' => '',
		'casesref' => null,
		'citingcases' => null,
		'counselplain' => null,
		'counseldef' => null,
		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
		'court_type' => 'TRI',
		'decidedon' => '2006-09-29',
		'deposition' => null,
		'favorof' => '',
		'findings' => '',
		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
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			'appellant' => 'Leben Laboratories Ltd.',
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			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
			'acts' => null,
			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
		'court_type' => 'TRI',
		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
			'acts' => null,
			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'counselplain' => null,
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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	'Judgement' => array(
		'id' => '75245',
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		'appealno' => null,
		'appellant' => 'Leben Laboratories Ltd.',
		'authreffered' => null,
		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
		'court_type' => 'TRI',
		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.

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			'id' => '75245',
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			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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			'id' => '75245',
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			'appellant' => 'Leben Laboratories Ltd.',
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			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
		'court_type' => 'TRI',
		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
			'acts' => null,
			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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	'Judgement' => array(
		'id' => '75245',
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		'appealno' => null,
		'appellant' => 'Leben Laboratories Ltd.',
		'authreffered' => null,
		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
		'court_type' => 'TRI',
		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.

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			'id' => '75245',
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			'appellant' => 'Leben Laboratories Ltd.',
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			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'decidedon' => '2006-09-29',
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		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
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			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.

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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
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			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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	'Judgement' => array(
		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
		'court_type' => 'TRI',
		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.

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			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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		'circuit' => null
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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	'title_for_layout' => 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | ',
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		'Judgement' => array(
			'id' => '75245',
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			'appealno' => null,
			'appellant' => 'Leben Laboratories Ltd.',
			'authreffered' => null,
			'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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			'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
			'court_type' => 'TRI',
			'decidedon' => '2006-09-29',
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			'judge' => 'K Singhal, V Murthy',
			'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p align="justify"> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p align="justify">3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p align="justify">On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p align="justify">Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p align="justify">4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p align="justify">2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p align="justify">6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p align="justify">7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p align="justify">Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p align="justify"> There is no room for any intendment. There is no equity about a tax.</p><p align="justify"> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p align="justify"> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p align="justify">In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p align="justify"> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p align="justify">Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p align="justify">The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p align="justify">9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p align="justify">10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p align="justify">Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p align="justify">11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p align="justify">In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p align="justify">13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p align="justify">Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p align="justify">14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p align="justify">Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p align="justify">15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p align="justify"> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p align="justify"> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p align="justify">Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p align="justify">16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p align="justify">17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p align="justify">Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p align="justify">Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p align="justify">18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p align="justify">Therefore, reference to the circular, in this case is misplaced.</p><p align="justify">19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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			'pubs' => '(2007)294ITR1(Mum.)',
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$title_for_layout = 'Leben Laboratories Ltd Vs Deputy Commissioner of Income Tax - Citation 75245 - Court Judgment | '
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		'id' => '75245',
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		'appellant' => 'Leben Laboratories Ltd.',
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		'casename' => 'Leben Laboratories Ltd. Vs. Deputy Commissioner of Income Tax',
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		'court' => 'Income Tax Appellate Tribunal ITAT Mumbai',
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		'decidedon' => '2006-09-29',
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		'judge' => 'K Singhal, V Murthy',
		'judgement' => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.</p><p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.</p><p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).</p><p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.</p><p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.</p><p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.</p><p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.</p><p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.</p><p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.</p><p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.</p><p> There is no room for any intendment. There is no equity about a tax.</p><p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.</p><p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.</p><p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.</p><p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.</p><p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.</p><p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.</p><p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.</p><p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.</p><p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.</p><p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.</p><p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.</p><p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.</p><p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.</p><p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.</p><p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.</p><p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.</p><p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.</p><p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.</p><p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.</p><p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.</p><p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.</p><p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.</p><p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.</p><p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.</p><p>Therefore, reference to the circular, in this case is misplaced.</p><p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.',
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	(int) 0 => ' 1. In the circumstances and facts of our case, the learned CIT(A) has erred in: (a) sustaining deduction under Section 80HHC at Rs. 26,67,213 instead of giving necessary direction to the AO to allow the duly claimed deduction under Section 80HHC at Rs. 38,07,772 by resorting to the provision of Section 80-IA(9) despite the fact that the provisions of Section 80HHC and Section 80-IA are independent of each other and the assessee company has not claimed the total deduction under both the sections in excess of the gross total income.',
	(int) 1 => '<p> (b) sustaining non-eligibility in respect of scrap sale of Rs. 15,130 by considering the same as not derived from the manufacturing activities of the assessee company and consequently reducing the allowable deduction under Section 80-IA.2. The ground No. 1(b) has not been pressed before us and therefore, the only issue which remains for our consideration relates to the interpretation of Section 80-IA(9) of IT Act, 1961 (Act). Briefly stated the facts are these : The assessee was running an industrial undertaking, profits of which were eligible for deduction under Sections 80-IA and 80HHC of the Act. As per the computation of income of the assessee, the gross total income derived from industrial undertaking was declared at Rs. 97,56,015 which included export incentives of Rs. 44,82,994. The assessee claimed deduction of Rs. 29,26,804 under Section 80-IA being 30 per cent of the gross total income and Rs. 38,07,772 under Section 80HHC in accordance with the formula given in that section. The assessee also claimed deduction under Section 80G at Rs. 10,000 and thus total income was declared at Rs. 30,11,440. The AO while computing deduction under Section 80-IA excluded the scrap sales of Rs. 15,130 from the gross total income and allowed deduction of Rs. 29,22,265 being 30 per cent of the balance amount. While computing deduction under Section 80HHC, the AO was of the view that no deduction can be allowed to the extent of profits for which deduction has been allowed under Section 80-IA in view of the provisions of Sub-section (9) of Section 80-IA. Accordingly, the profit of the export business, excluding export incentives, was taken at Rs. 52,73,021 and then deducted Rs. 29,22,265 therefrom which amounted to Rs. 23,50,756 (Rs. 52,73,021 - Rs. 29,22,265). Then he calculated the deduction under that section by applying the formula given in Sub-section (3) and thus worked out the deduction at Rs. 26,67,213 as against Rs. 38,07,772 computed by the assessee. Thus the total income was determined by him at Rs. 41,56,537. On appeal, the CIT(A) confirmed the computation made by the AO. Aggrieved by the same, the assessee has preferred this appeal before the Tribunal.',
	(int) 2 => '<p>3. Both the parties have been heard at length. The learned Counsel for the assessee Mr. Irani has submitted before us that the issue arising in the appeal stands covered in favour of the assessee by the following decisions: (c) Asstt. C1T v. Rajoo Engineers Ltd. (2006) 102 TTJ (Rajkot) 733 : (2006) 100 ITD 555 (Rajkot); (d) Wockhardt Ltd. v. Asstt. CIT (ITA No. 3991/Mum/2005, dt. 24th Feb., 2006).',
	(int) 3 => '<p>On the other hand the learned Departmental Representative vehemently supported the order of the AO by submitting that Sub-section (9) of Section 80-IA clearly prohibits deduction under other provisions of Chapter VI-A to the extent the profits of the industrial undertaking have been claimed and allowed as deduction under Section 80-IA. She drew our attention to the said provisions to point out that there are two limbs viz. (1) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C-Deductions in respect of certain incomes" and (2) such deductions shall in no case exceed the profits and gains of such eligible business of the undertaking. According to her, both the limbs are cumulative and therefore, effect has to be given to both the limbs.',
	(int) 4 => '<p>Proceeding further, she submitted that the decisions relied upon by the learned Counsel for the assessee are distinguishable on facts and further the first limb mentioned above had not been taken into consideration in those decisions.',
	(int) 5 => '<p>4. Faced with this situation, the learned Counsel for the assessee submitted, in reply, that provisions of Section 80-IA(9) do not override the provisions of Section 80HHC inasmuch as the legislature has not used the expression "Notwithstanding any other provisions contained in other provisions of Chapter VI-A". In this connection he drew our attention to the provisions of Section 80AB, wherein such expression has been employed by the legislature and therefore, it is only the provisions of Section 80AB which control or govern the provisions contained under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A. It was further submitted that there is no provision in Section 80HHC under which any deduction could be made from the profits of the business on account of deduction allowed in Section 8O-IA(9). According to him, Section 80HHC is an independent provision and therefore, computation has to be made in accordance with the provisions of Section 80HHC independently. Proceeding further, it was submitted that both the limbs mentioned in Sub-section (9) should be construed as one, i.e., the object. According to him, the object of this sub-section is that all the deductions under Chapter VI-A should not exceed the profits derived from the industrial undertaking. Meaning thereby, if deductions computed under both the sections exceed the total profits derived from industrial undertaking, then the deductions under such sections would be restricted to such profits, but in no case the deduction computed under Section 80-IA can be reduced from the profits of business for the purpose of computing deduction under Section 80HHC.5. Rival submissions of the parties have been considered carefully. The question for our consideration relates to the interpretation of the provisions of Sub-section (9) of Section 80-IA effective from asst. yr.',
	(int) 6 => '<p>2000-01. The said sub-section is being reproduced as under: Where any amount of profits and gains of an undertaking or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case maybe.',
	(int) 7 => '<p>6. At this stage it may be mentioned that prior to asst. yr. 2000-01, the relevant provision of Section 80-IA was Sub-section (9A) which is also being reproduced as under: (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading 'C.- Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such eligible business of the undertaking or hotel, as the case may be.',
	(int) 8 => '<p>7. A bare reading of the above shows that both the provisions are identical except that the word "hotel" has been substituted by the word "enterprise". These provisions provide in clear terms that if any amount of profits and gains of an undertaking or of an enterprise is claimed and allowed under Section 80-IA, then (i) deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C- Deductions in respect of certain incomes" and (ii) shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise as the case may be.',
	(int) 9 => '<p>Thus, in our opinion, the legislature has clearly provided two limbs with reference to the profits and gains of an undertaking or an enterprise which have been claimed and allowed as deduction under Section 80-IA. The word "and" has also been used between these two limbs by the legislature and therefore, both the limbs are cumulative and mandatory in nature and consequently, the effect of either of the limbs cannot be ignored. Thus, the effect of both the limbs has to be taken into consideration while computing the deductions under the heading "C-Deductions in respect of certain incomes" in Chapter VI-A.8. It is the cardinal rule of interpretation that where the language used by the legislature is clear and unambiguous then the plain and natural meaning of the words should be supplied to the language used and resort to any rule of interpretation to unfold the intention is permissible only where the language is ambiguous. Plethora of decisions of the apex Court is there to support this proposition. The Hon'ble Supreme Court in the case of Smt. Tarulata Shyam and Ors. v. CIT , approved the observations in the case of Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) by observing as under: To us, there appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 (KB) at p. 71, that: in a taxing Act one has to look merely at what is clearly said.',
	(int) 10 => '<p> There is no room for any intendment. There is no equity about a tax.',
	(int) 11 => '<p> There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.',
	(int) 12 => '<p> Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.',
	(int) 13 => '<p>In the case of Keshavji Ravji and Co. v. CIT , the apex Court observed as under: As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature.Guru Devdatta VKSSS Maryadit v. State of Maharashtra AIR 2001 SC 1980, their Lordships of the apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning.',
	(int) 14 => '<p> It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning irrespective of consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus if they can have a proper application in circumstances conceivable within the contemplation of the statute.',
	(int) 15 => '<p>Though there are various judgments upholding the above principle but we may mention that Constitution Bench of the Hon'ble Supreme Court in the case of CIT v. Anjum M.H. Ghaswala and Ors. , has This exercise of purposive interpretation by looking into the object and scheme of the Act and the legislative intendment would arise, in our opinion, if the language of the statute is either ambiguous or conflicting or gives a meaning leading to absurdity.',
	(int) 16 => '<p>The above judgments make it clear beyond doubt that Courts are not required to look into the object or intention of the legislature by resorting to aids to interpretation where the language of a provision is clear and unambiguous. Consequently, the meaning of each word used by the legislature is to be given its plain and natural meaning and no word should be ignored while interpreting a provision of a statute. In view of the above discussion, it has to be held that effect of both the limbs has to be given while computing deductions under any other provision of Chapter VI-A under the heading "C-Deductions in respect of certain incomes" inasmuch as the language used by the legislature is quite clear and unambiguous.',
	(int) 17 => '<p>9. The contention of Mr. Irani, learned Counsel for assessee that Section 80HHC is an independent section and is not subjected to other provisions and therefore could not be controlled or governed by other provisions unless the other provisions are non obstante appears to be attractive but without force. Normally, the legislature provides conditions/limitations in the same section. It also uses the expression "subject to other provisions of the Act" where the main provisions are to be regulated by other provisions. Sometimes, it enacts non obstante provisions by using the expression "Notwithstanding anything contained in other sections". But that does not mean that legislature cannot provide conditions or limitation in other provisions without using the expressions mentioned above. For example, Sections 32 and 33 allow depreciation and development rebate in respect of asset acquired by the assessee independently yet conditions are provided in Section 34 and also provide for disallowance of deprecation in Section 38. None of the provisions uses the aforesaid expressions. Similarly, various deductions are allowed in respect of the expenditure incurred by the assessee under Sections 30 to 37 independently yet these sections are controlled by Section 14A. While interpreting the provisions in an enactment, it is the intention of the legislature which is to be seen and in case of any conflict, it is to be reconciled reasonably.',
	(int) 18 => '<p>10. Similar controversy arose before various High Courts in interpreting the provisions of Section 37(4) of the Act. This sub-section was non obstante provision vis-a-vis Sub-sections. (1) and (3) of Section 37 and provided disallowance of any expenditure/depreciation in respect of a guest house maintained by the assessee. In the case of CIT v. Chase Bright Steels Ltd. and in the case of Century Spinning &amp; Manufacturing Co. Ltd. v. CTF , the Hon'ble Bombay High Court held that Section 37(4) had overriding effect only over the provisions of Section 37(1) and (3) and not over the independent Sections 30 to 36.',
	(int) 19 => '<p>Meaning thereby that Sections 30 to 36 could not be controlled by Section 37(4) and consequently rent paid and depreciation allowed in respect of guest house under Sections 30 and 32 could not be disallowed under Section 37(4). Similar view was taken by the Hon'ble Gujarat High Court in the case of CYT v. Ahmedabad Manufacturing &amp; Calico Printing Co. Ltd. (1992) 105 CTR (Guj) 322 : (1992) 197 LTR 538 (Guj) and in the case of CIT v. Maharana Mills Ltd. (1994) 120 CTR (Guj) 271 : (1994) 208 LTR 972 (Guj). However, contrary view was taken by Kerala High Court in the case of United Catalysts (India) Ltd. v. CIT and Madhya Pradesh High Court in the case of Hindustan Electro Graphites Ltd. v. CIT (1998) 96 Taxman 163 (MR) by holding that in view of specific provisions of Section 37(4) the assessee could not put forward a claim under the general provisions of Section 30 or 32. This controversy has now been resolved by the Hon'ble Supreme Court in the case of Britannia Industries Ltd. v. CYT by overruling the decision of Bombay High Court in the case of Chase Bright Steels (supra) by holding that no expenditure/allowance could be made in respect of a guest house in view of the specific provisions of Section 37(4) notwithstanding the language used by the legislature in Section 37(4). The Court reaffirmed the principle that where intention of the legislature is clear then, no violation is permissible to the language employed by the legislature.',
	(int) 20 => '<p>11. In view of the above discussions, it has to be held that if specific disallowance has been made by the legislature even elsewhere in the Act, then such disallowance has to be made despite there being no provision for disallowance in the main section. It is the dominant intention of the legislature which would prevail irrespective of the place where it is expressed. The decision of Rajkot Bench of the Tribunal in the case of Rajoo Engineers Ltd. (supra) relied on by the assessee's counsel does not help the assessee and is quite distinguishable inasmuch as the issue in that case was quite different.',
	(int) 21 => '<p>In that case the dispute was whether deduction under Section 80HHC was to be allowed without excluding the deductions under Section 80-I or Section 80G. There is no provision either in Section 80-I or Section 80HHC similar to the provisions of Section 80-IA(9). Therefore, in the absence of any such provisions, the Tribunal rightly held that deductions under Section 80-I could not be deducted from profits of business while computing deduction under Section 80HHC.12. The other contention of assessee's counsel is that both the limbs should be construed as one in conformity with the object of the provisions, meaning thereby that total deductions should not exceed the profits of the undertaking and therefore, any other construction to defeat such object should be avoided. In our humble view, such contention is unsustainable in law. We have already held that where language is clear and unambiguous then the Court should not proceed to ascertain the intention of the legislature. Intention is to be seen only where language is ambiguous. Where the legislature has provided certain conditions/limitations to be fulfilled or to be given effect to then, none of such conditions/limitations can be ignored and it is the duty of the tax authorities to give effect to the same. It is also pertinent to note, even at the cost of repetition, that in Section 80-IA(9), the legislature has used the word 'and' between the two limbs which clearly shows that legislature intended that both the limbs are to be given effect and therefore, none of the two can be ignored. We hold accordingly.',
	(int) 22 => '<p>13. At this stage, it would also be useful to refer to the judgment of the apex Court in the case of IPCA Laboratory Ltd. v. Dy. CLT (2004) 187 CTR (SC) 513 : (2004) 266 LTR 521 (SC). In that case the Court was concerned with the interpretation of Section 80HHC(3). The contention of assessee's counsel was that provisions being incentive provisions should be construed liberally. This contention was met by observing as under: Undoubtedly Section 80HHC has been incorporated with a view to providing incentive to export houses. Even though a liberal interpretation has to be given to such a provision the interpretation has to be as per the wording of this section. If the wordings of the section are clear then benefits, which are not available under the section, cannot be conferred by ignoring or misinterpreting words in the section.',
	(int) 23 => '<p>Proceeding further, the Court observed that the word 'and' has been used by the legislature between Clause (a) and (b) and therefore, profits are to be calculated by counting profit or loss in respect of export of goods falling in Clause (a) and (b) of Section 80HHC. Thus if there was loss in trading export and profit in export of manufacturing items then it is the net profit/loss which will have to be considered for the purpose of allowing deduction. If net result was loss then, no deduction was allowable. The ratio laid down by this judgment supports the view taken by us.',
	(int) 24 => '<p>14. The decisions relied upon by the learned Counsel for the assessee are distinguishable for the reasons given hereafter. Before adverting to these decisions, we would first refer to the observations of the apex Court in the case of C]T v. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), wherein their Lordships observed as under: It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, Courts must carefully try to ascertain the true principle laid down by the decision.',
	(int) 25 => '<p>Considering the principle laid down in the above judgment, let us now consider the decisions relied on by the learned Counsel for the assessee.',
	(int) 26 => '<p>15. Much reliance has been placed on the decision of the Tribunal in the case of Mittal Clothing Co. (supra). In that case, the AO allowed the deductions under Sections 80-IB and 80HHC. Subsequently, CIT, exercising its powers under Section 263, held that no deduction under Section 80HHC could be allowed in view of Section 80-IA(9) along with Section 80-IB(13) and Section 80-IC(5) of the Act. The contentions of assessee before the Tribunal were that (i) CIT erred in holding that no deduction is allowable under Section 80HHC if deduction under Section 80-IB is allowed and (ii) the object of Section 80-IA(9) is to prevent double deductions of more than 100 per cent of profits and gains of the undertaking by claiming multiple deductions under different sections in Chapter VI-A. In view of the same, it was further contended that both the deductions were permissible subject to the condition that total deductions would not exceed the profits or gains of the undertaking. It is in this context that the Tribunal held as under: 12. Therefore, the object of insertion of Section 80-IA(9A), which later became Section 80-IA(9) in the present section, was to prevent deduction of more than 100 per cent of profits and gains of the undertaking by claiming multiple deduction. The object of insertion of Section 80-IA(9A) was not to prevent claim of deduction under more than one section, under Chapter VI-A, where the assessee satisfies conditions of these sections, but only to ensure that the sum total of the deductions so claimed by the assessee does not exceed the profits and gains of the undertaking in respect of which deductions are allowable.',
	(int) 27 => '<p> 13. When one peruses the second limb of Section 80-IA(9) which reads 'shall in no case exceed the profits and gains of such eligible business of undertaking or enterprise, as the case may be', the second limb of Section 80-IA(9) conveys the meaning that the sum total deduction allowed under Section 80-IA/80-IB and other incentive provisions of Chapter VI-A should not exceed the profits and gains of such eligible business. Otherwise, the second limb need not be there at all.',
	(int) 28 => '<p> 17. We are of the view that the provisions of Section 80-IA(9) only regulate the deductions allowable under Chapter VI-A and there is no restriction contained therein to regulate other deductions. The provisions of Chapter VI-A are meant to encourage various objects and these incentive provisions must be construed for the benefit of the taxpayer. For these reasons, we hold that since the assessee has not claimed more than 100 per cent deduction in respect of the profits of the undertaking and since the AO has also not allowed more than 100 per cent deduction of the profits under both Sections 80-IB and 80HHG there is no need to interfere with the order of the AO.The above observations are to be understood in the context of the issue before the Tribunal. The Tribunal, in the above case, was not concerned with the issue 'whether profits of business could be reduced by the deduction allowed under Section 80-IA' with which we are concerned. The issue before the Tribunal was entirely different, i.e. whether deduction under Section 80HHC could be denied where deduction under Section 80-IA/80-IB was allowed to assessee. The observations of the Tribunal mentioned above clearly show that the Tribunal was considering only the second limb as clearly mentioned in para 13 and no observations were made with reference to first limb. Hence, the Tribunal rightly held that deduction under Section 80HHC could not be denied. Thus, the said decision has no impact on the issue before us.',
	(int) 29 => '<p>Therefore, in our humble opinion, the ratio laid down by the Tribunal in that case does not help the assessee.',
	(int) 30 => '<p>16. The decision of Rajkot Bench in the case of Rajoo Engineers Ltd. (supra) has already been discussed by us in the earlier part of the order. We have already held that issue there was entirely different as the Tribunal was concerned with the issue whether Section 80HHC deduction was to be allowed without excluding the deduction under Sections 80-I and 80G. Since there was no provision either under Section 80HHC or under Section 80-I to the effect that deduction under Section 80-I is to be reduced for the profits, the Tribunal held that both the deductions were to be allowed independently without any restriction. However, we are concerned with the first limb of the provisions of Section 80-IA(9) which restricts the claim of the assessee under other provisions in Chapter VI-A. Hence, that decision is inapplicable to the present case.',
	(int) 31 => '<p>17. The next decision relied upon by assessee's counsel is in the case of Toshica Creation (supra). In that case, the AO first allowed deduction under Section 80-IB on the gross total income and then allowed deduction under Section 80HHC on the reduced figure of gross total income. The Tribunal held that deduction under Section 80HHC could not be allowed on reduced figure of gross total income. In coming to this conclusion, it referred to the provisions of Section 80AB and concluded that only Section 80AB has overriding effect over other provisions contained in Chapter VI-A. Meaning thereby, Section 80HHC could not be controlled by any other section. This reasoning is contrary to the rule of interpretation as enunciated by the Hon'ble Supreme Court in the case of Britannia Industries (supra). The Tribunal in the case mentioned above, has not given any reasons for not applying the first limb of provisions of Section 80-IA(9) of the Act.',
	(int) 32 => '<p>Considering the various decisions of the apex Court, it has already been held by us in earlier part of the order that specific conditions/limitations provided by the statute cannot be ignored.',
	(int) 33 => '<p>Therefore, the said decision of the Tribunal cannot be applied in deciding the issue before us. It may also be mentioned that the decision was rendered by single Member which is not binding on the Division Bench. The decision of Tribunal in Wockhardt Ltd. (supra) is based on the above decision. Therefore, the same also stands distinguished.',
	(int) 34 => '<p>18. Though we have already held that in view of the clear language employed by the legislature, the Courts are not required to look into the intention of the legislature yet on going through the circular mentioned in the decision of Tribunal in the case of Mittal Clothing Co. (supra), we do not find anything to suggest that first limb in Section 80-IA(9) is to be ignored. Circular simply refers to the intention of the legislature in respect of the second limb. Therefore, the circular does not support the case of assessee. The apex Court in the case of IPCA Laboratory (supra) has clearly held that relief cannot be allowed by ignoring or misreading the provisions of the Act.',
	(int) 35 => '<p>Therefore, reference to the circular, in this case is misplaced.',
	(int) 36 => '<p>19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.'
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19. Now we come to the merits of the case. We have already referred to the relevant provisions of Sub-section (9) of Section 80-IA. It clearly provides that where any amount of profit of an undertaking or of an enterprise of an assessee is claimed and allowed under this section then deduction to the extent of such profit shall not be allowed under any other provisions of Chapter VI-A under the heading "C-Deductions in respect of certain incomes". Section 80HHC falls under the above heading in Chapter VI-A. Therefore, while computing the relief under Section 80HHC, the tax authorities are duty bound to give effect to both the limbs provided in Section 80-IA(9). Therefore, in our opinion, the lower authorities were justified in reducing the profits of business of the undertaking by the amount of profits allowed as deduction under Section 80-IA while computing the deduction under Section 80HHC.20. In view of the above discussion, the order of the learned CIT(A) is upheld.