2013 (10) TMI 367 - HC - Income Tax

Deduction of eligible profit u/s 80HHC of the Income Tax Act - Submitted by the assessee in the letter that in the assessment order entire export profit was required to be reduced from the book profit and the deduction could not have been restricted to the extent of 30% as provided in sub-section (1B) of section 80HHC of the Act Held that - Claim of the assessee was genuine and acceptable on merits - A.O. Himself has stated in the assessment order that although the claim of the assessee is genuine - There is no dispute that the claim of the assessee is genuine and is in accordance with the judgment of Hon ble Apex Court rendered in the case of Ajanta Pharma Ltd 2010 (9) TMI 8 - SUPREME COURT Decided against the Revenue.

Summary

Issues:
- Interpretation of Section 80HHC(1B) of the Income Tax Act, 1961
- Validity of the deduction claimed by the assessee
- Assessing Officer's refusal to consider the claim without a revised return
- Applicability of Supreme Court judgments in Goetze (India) Ltd. v. CIT and Ajanta Pharma Ltd.
- Jurisdiction of the Appellate Commissioner and the Income Tax Appellate Tribunal

Analysis:
1. The primary issue in this case revolves around the interpretation of Section 80HHC(1B) of the Income Tax Act, 1961, concerning the deduction claimed by the assessee. The respondent had claimed a deduction by reducing the entire export profit from the book profit, contending that the deduction should not be limited to 30% as per the Act. The Assessing Officer initially rejected the claim, citing the absence of provisions for amending the return without a revised filing, despite acknowledging the genuineness of the claim.

2. Subsequently, the CIT(A) allowed the appeal, directing the Assessing Officer to recompute the book profit in line with the Supreme Court judgment in Ajanta Pharma Ltd. This decision was challenged by the Revenue before the Income Tax Appellate Tribunal, which dismissed the appeal. The Tribunal noted that the claim of the assessee was genuine and aligned with the Apex Court's ruling in Ajanta Pharma Ltd., emphasizing the authenticity of the claim.

3. The High Court observed that the Assessing Officer had acknowledged the genuineness of the claim but withheld relief due to the absence of a revised return. However, the Appellate Commissioner, relying on the precedent set by the Supreme Court, rightfully allowed the claim, which was later upheld by the Tribunal. The Court clarified that the decision in Goetze (India) Ltd. v. CIT was limited to the Assessing Officer's power to entertain deductions without a revised return and did not affect the authority under section 254 of the Act.

4. Ultimately, the Court upheld the decisions of the Appellate Commissioner and the Tribunal, emphasizing that the claim was genuine and meritorious. Since the claim was valid on its merits, the Appellate Commissioner acted within its jurisdiction in allowing the deduction. Consequently, the Court found no substantial question of law warranting further consideration and dismissed the appeal.

5. In conclusion, the judgment highlights the importance of adhering to legal provisions while considering deductions under the Income Tax Act, ensuring that genuine claims are duly recognized and processed, even in the absence of a revised return, as long as they align with relevant judicial precedents and statutory provisions.