2005 (8) TMI 704 - HC - Income Tax

Summary

Issues: Interpretation of total turnover for deductions under Section 80HHC of the Income-tax Act, 1961.

Analysis:
The judgment addressed the issue of whether sales tax and excise duty should be included in the total turnover of an assessee for the purpose of deductions under Section 80HHC of the Income-tax Act, 1961. The Commissioner of Income-tax (Appeals) relied on a previous Tribunal order and held that sales tax and excise duty should not form part of the total turnover. The High Courts of Calcutta, Kerala, and Madras had also taken a similar view in previous cases. The Revenue's counsel did not dispute this proposition but argued that there was no evidence in the present case to show that the turnover included excise duty and sales tax. However, the court found that the assessee had claimed in writing during the assessment proceedings that the turnover figure included excise duty and sales tax. Therefore, these amounts had to be deducted from the total turnover for granting deductions under Section 80HHC.

The court concluded that the Assessing Officer, CIT (Appeals), and the Tribunal had correctly followed the decision in a previous case and granted deductions under Section 80HHC after excluding the component of sales tax and excise duty paid by the assessee from the turnover. The court found no merit in the argument that the deductions were legally impermissible due to lack of evidence. As the deductions were granted in accordance with the law, the court dismissed the case, stating that no substantial question of law arose for consideration.