9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (1) TMI 783 - AT - Income TaxDisallowance of the claim of the assessee u/s 80HHC for the DEPB entitlement received - assessee is having export turnover of Rs.10 crores and 90% of DEPB was reduced from profit of business for the purpose of computation of deduction allowable to the assessee under section 80 HHC of the Act but the same was not added back as per the amended provision of section 80HHC - Held that - manner of computation of profit on sale of DEPB and as per the Special Bench, face value of DEPB is to be reduced from sale proceeds of DEPB and if the sale proceeds is higher than the face value, such excess is profit on sale of DEPB, order of the Ld CIT(A) on this issue set aside and restore this matter back to the file of the Assessing Officer for a fresh decision in the light of the decision of Special Bench of the Tribunal rendered in the case of Topman Exports Disallowance of the claim of the assessee u/s 80HHC on the Export sale - If the Assessing Officer finds that this RBI Master Circular is applicable in the present case and the export proceeds were realized as per this RBI Master circular, then such export proceeds should not be reduced from export turnover for the purpose of computation of deduction allowable to the assessee u/s 80HHC, matter remanded for fresh consideration. Netting the interest received and paid by the assessee - assessee has earned interest income - Assessing Officer has excluded the same from business profit and taxed the same under the head income from other sources - Held that - issue should also go back to the file of the Assessing Officer for a fresh decision regarding this claim for netting of interest and hence we set aside the order of the Ld CIT(A) on this issue and restore this matter back to the file of the Assessing Officer for a fresh decision, matter remanded to AO.
Issues involved:
1. Disallowance of claim under section 80HHC for DEPB entitlement. 2. Disallowance of claim under section 80HHC on export sale. 3. Treatment of income as income from other sources instead of business income. 4. Netting of interest received and paid. 5. Disallowance of certain expenses like telephone, foreign traveling, and vehicle-related expenses. Detailed Analysis: 1. The assessee's appeal challenged the disallowance of the claim under section 80HHC for DEPB entitlement. The ITAT found that the Special Bench's decision in the case of Topman Exports clarified that only 90% of profit on the sale of DEPB should be excluded, not 90% of total DEPB receipts. The ITAT set aside the CIT(A)'s order and directed the matter to be reconsidered by the Assessing Officer in line with the Special Bench's decision. The appeal on this issue was allowed for statistical purposes. 2. The ITAT addressed the disallowance of the claim under section 80HHC on export sale. It noted that the RBI Master Circular on Export of Goods and Services was not properly considered by the CIT(A). The ITAT directed the matter back to the Assessing Officer for a fresh decision, emphasizing the need to assess the applicability of the circular and the status of the assessee as a status holder exporter. The appeal on this issue was allowed for statistical purposes. 3. The issue of treating income as income from other sources instead of business income was raised. The ITAT referred to a judgment of the Delhi High Court in the case of Shriram Honda Power Equipment Ltd., which supported the assessee's claim for netting interest received and paid. The ITAT set aside the CIT(A)'s order and instructed the Assessing Officer to reconsider the matter in light of the High Court judgment. The appeal on this issue was allowed for statistical purposes. 4. Regarding the disallowance of certain expenses, the ITAT found that estimated disallowances were made due to incomplete details provided by the assessee. It decided to reduce the disallowance under telephone and vehicle expenses to 1/10th of the expenses, as opposed to the 1/8th disallowed by the Assessing Officer. However, it confirmed the disallowance of foreign traveling expenses made by the CIT(A). The appeal on this issue was partly allowed. In conclusion, the ITAT partially allowed the assessee's appeal, addressing various issues related to the disallowance of claims under section 80HHC, treatment of income, netting of interest, and disallowance of certain expenses. The judgments and legal principles cited guided the ITAT's decisions on each issue, ensuring a thorough and detailed analysis of the case.
|
