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Issues Involved: Computation of deduction u/s 80HHC of the Income Tax Act in relation to income from DEPB and DFRC treated as business income.
The judgment pertains to the appeal by the Revenue which was remanded back to the Tribunal by the Hon'ble Punjab & Haryana High Court in view of the ratio laid down in the case of CIT Vs. F.C. Sondhi & Company (P) Ltd. The issue at hand is the computation of deduction u/s 80HHC of the Income Tax Act concerning income from DEPB and DFRC to be treated as business income. Both authorized representatives relied on submissions made in earlier cases with the lead order in M/s Fitex Industries, Ludhiana Vs. A.C.I.T.-V, Ludhiana. The Tribunal had previously directed the Assessing Officer to recompute the deduction u/s 80HHC in line with the directions given in the earlier order, after allowing a reasonable opportunity of hearing to the assessee. The issue in the current appeal is identical to the one in M/s Fitex Industries & Others, and the order in that case shall apply mutatis mutandis. The Assessing Officer is instructed to compute the deduction under section 80HHC following the directions in the earlier order, after providing a reasonable opportunity to the assessee. The captioned appeal is disposed of in accordance with the directions of the Hon'ble Bombay High Court in Kalapatru Colours & Chemicals, which was approved by the Jurisdictional Court. The Registry is directed to enclose a copy of the order in Fitex Industries & Others for reference. The appeal is allowed for statistical purposes. The order was pronounced in the Open Court on the 7th day of September, 2011.
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