IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL N0.798 OF 2007 The Commissioner of Income Tax VI Mumbai .. Appellant Vs. M/s Glaxo Smithkline Pharmaceuticals Ltd ... Respondent + Mr.A.D.Kango for Appellant Mr.Percy Pardiwalla with Mr.Lingam and Ms.Nikita Kadam i/b M & M Legal Ventures for Respondent CORAM CORAM CORAM : Dr.S.Radhakrishnan and : Dr.S.Radhakrishnan and : Dr.S.Radhakrishnan and A.V.Nirgude, A.V.Nirgude, A.V.Nirgude, JJ JJ JJ DATE DATE DATE : 23rd June, 2008. : 23rd June, 2008. : 23rd June, 2008. P.C. P.C. P.C. 1. Heard learned counsel for the appellant and learned counsel for the respondent. By the above appeal the appellant raises two following substantial questions of law which are as under : (a) Whether on the facts and circumstances of the case and in law, the Hon’ble Tribunal and learned CIT were justified in directing the Assessing Officer for computing the deduction under section 80-I, the eligible profits be not reduced by deduction admissible under section 80HHC? (b) Whether on the facts and circumstances of the case and in law, the Hon’ble Tribunal and learned CIT were justified in treating the receipt of Rs.1.5 crores as capital receipt by holding the same as amount received for not computing with the buyers ? 2. Mr.Pardiwalla, learned counsel for the respondent fairly stated that question no.1 does 2 not survive and is wrongly mentioned as section 80 HHC and it should be 80HH. After hearing both the parties, learned counsel for the respondent pointed out that this very issue and question of law was considered by this Court in C.I.T.vs Nima Specific Family Trust 248 ITR 29 wherein this Court has considered the scope of section 80-I and section 80 HH and finally given a finding that the concept of deduction based on capital employed is completely given a go-by. This Court also held that special deduction is first given under section 80 HH and then special deduction will be given under section 80-I to the extent available. To put in other words, the assessee is entitled to deductions under section 80 HH and even section 80-I to the extent available. The revenue’s contention that once being given section 80 HH the assessee is not entitled to the benefit of section 80-I is not sustainable. In fact, this view of the Bombay High Court was upheld by the Supreme Court in Joint Commissioner of Income Tax vs Mandideep Eng.and Pkg.Ind.P.Ltd (2007) 292 ITR 1 (SC). 3. Under these circumstances, the first question does not survive as the same has already been 3 answered in favour of revenue. 4. As far as 2nd question is concerned, Mr.Pardiwalla pointed out that as far as Assessment year 1995-96 is concerned, this Court while considering the issue of retrospective applicability as held in Commissioner of Income Tax vs Narendra D. Desai (2008) 214 ITR (Bom) 190 (2008) 1 DTR 106 wherein this Court has clearly held that the amendment which came into force only from 1.4.2003 and same will be applicable only from Assessment year 2003-04 and for the subsequent years the said will not have retrospective effect. In view thereof, even second question is answered in favour of assessee and against the revenue by the aforesaid judgment. 5. We do not find any substance in the above appeal. Appeal stands dismissed. {A.V.Nirgude, {A.V.Nirgude, {A.V.Nirgude, } } } (Dr.S.Radhakrishnan, (Dr.S.Radhakrishnan, (Dr.S.Radhakrishnan, J} J} J}