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TAXAP/364/2008 2/ 3 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No.364 of 2008
With
TAX
APPEAL No.365 of 2008
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THE
COMMISSIONER OF INCOME TAX, RAJKOT-I - Appellant
Versus
PATIDAR
INTERMEDIATES PVT. LTD - Opponent
==========================================================
Appearance :
MR
MANISH R BHATT for Appellant.
None for
Opponent.
==========================================================
CORAM
:
HONOURABLE
MR. JUSTICE K. A. PUJ
and
HONOURABLE
MR. JUSTICE BANKIM N. MEHTA
Date
: 29/07/2008
ORAL
ORDER
(Per
: HONOURABLE MR. JUSTICE K. A. PUJ)
The Revenue has filed these two
Tax Appeals under Section 260A of the Income Tax Act, 1961 [?Sthe
Act?? for short] for the assessment years 1998-99 and 1997-98
respectively proposing to formulate the following substantial
questions of law for determination and consideration of this Court:
Tax Appeal No.365 of
2008
?SA. Whether
the Appellate Tribunal was right in law and on facts in confirming
the order passed by the CIT (A) deleting the disallowance of
Rs.11,65,395/- on account of depreciation by holding that the
expenditure in respect of installing water treatment plant was
revenue expenditure?
B. Whether
the Appellate Tribunal was right in law and on facts in confirming
the order passed by the CIT (A) in holding that deduction u/s. 80HH
is not to be excluded from profit while computing deduction u/s.80HHC
of the Act???
Tax Appeal No.364 of
2008
?SA. Whether
the Appellate Tribunal was right in law and on facts in confirming
the order passed by the CIT (A) deleting the disallowance of
Rs.3,10,353/- on account of depreciation by holding that the
expenditure in respect of installing water treatment plant was
revenue expenditure?
B. Whether
the Appellate Tribunal was right in law and on facts in confirming
the order passed by the CIT (A) in holding that deduction u/s. 80HH
is not to be excluded from profit while computing deduction u/s.80HHC
of the Act???
2. Mrs.Mauna Bhatt, learned
Standing Counsel for the Revenue, has submitted that in view of the
Full Bench decision of Kerala High Court in the case of Commissioner
of Income Tax vs. Glen View Rubber Co. P. Ltd., [2007] 291 ITR 1
(Ker) [FB], which took the
view that the expenses incurred in water treatment plant are capital
expenditure, substantial question of law arises and, hence, the same
may be formulated.
3. Accordingly, we formulate
Question No.[A] proposed by the Revenue in both the Tax Appeals for
determination and consideration of this Court.
4. So far as Question [B] in
both the Tax Appeals is concerned, both the deduction under Section
80HH and 80HHC of the Act are separate deductions and, hence, there
is no question of exclusion of either one of these deductions while
computing the deduction under Section 80HHC of the Act. Hence,
Question [B] cannot be said to be substantial question of law.
5. In above view of the matter,
both these appeals are admitted only in terms of Question [A] as
indicated above.
6. Notice to other side.
Additional Paper-Book, if any, be filed within three months.
[K.A.
Puj, J.]
[Bankim
N. Mehta, J.]
Rajendra
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