S.K. Kulshrestha, J.

1. The Income-tax Appellate Tribunal, Jabalpur Bench, Jabalpur, has referred at the instance of the assessee-company on an application being made under Section 256(1) of the Income-tax Act, 1961, the following question of law arising out of the order dated July 16, 1992, in I. T. A. No. 246/Jab of 1987 and cross-objection No. 46/Jab. of 1987 for the assessment year 1984-85 for the opinion of this court :

" Whether the Tribunal is right in law in holding that the deduction under Section 80I is to be allowed on balance of income after deducting the relief under Section 80HH from gross total income and not from gross total income as defined in Section 80B(5) of the Act ?"

2. The assessee is a private company engaged in the business of manufacturing and sale of bidis. The assessees were assessed for the assessment year 1984-85 and the Assessing Officer held that the assessee-company was not entitled to deductions under Sections 80HH and 80I of the Act. On appeal, the Commissioner of Income-tax (Appeals) held the assessee to be entitled to deduction of Rs. 1,27,818 under Section 80HH and Rs. 4,52,211 under Section 80I of the Act. In computing the deduction unde