1998 (4) TMI 544 - AT - Income Tax

Summary

Issues involved: Appeal against order revising assessment under section 263 for deduction allowed under section 80HHC.

Summary:
1. The dispute centered around whether to consider gross or net amount of consultancy fees for deduction under section 80HHC.
2. The CIT revised the assessment order, claiming the Assessing Officer erred in allowing deduction based on the net amount of consultancy fees.
3. The assessee argued for deduction based on net amount, citing legal precedents supporting this interpretation.
4. The Departmental Representative supported the CIT's order, advocating for deduction based on gross amount.
5. The Tribunal analyzed the statutory provisions and legal principles, concluding that deduction should be based on the net amount included in the profits and gains of business.
6. Two categories of cases were identified: where the net receipt is clear and where it is not discernible due to common expenditure.
7. The Tribunal upheld the Assessing Officer's decision to deduct 90% of the net consultancy fee included in the business income, rejecting the CIT's interpretation.
8. The Tribunal allowed the assessee's appeal, canceling the revision made by the CIT and restoring the assessment order.