2014 (10) TMI 264 - HC - Income Tax

Determination of amount of deduction u/s 80HHC Held that - The tribunal has correctly appreciated the nature of amounts - They were sundry credit balances returned back - each of the amounts and which have been expended do not constitute receipts and are items of expenses, then, such findings of fact cannot be termed as perverse - this explanation was totally misread and misapplied by the AO and the Commissioner in their orders the order of the Tribunal is upheld Decided against the revenue.

Summary

Issues:
Interpretation of clause in explanation (baa) for section 80HHC - Whether tribunal's decision was correct.

Analysis:
The judgment by the High Court of Bombay dealt with the interpretation of a clause in the explanation (baa) for section 80HHC. The Appeals challenged the tribunal's common order from 30th September, 2011, regarding three appeals of the assessee and five appeals of the revenue for the assessment years 2001-02, 2002-03, and 2004-05. Mr. Pinto, representing the Revenue, argued that the tribunal's interpretation of the clause was erroneous and should be admitted for consideration. On the other hand, Mr. Gandhi, for the Respondents, contended that the tribunal's findings were based on facts and not substantial questions of law. The tribunal had determined that the amounts in question were expenses and not receipts, as per internal Page 21 paragraph 33.3 of the order. The High Court examined the tribunal's order and found that the tribunal had correctly understood the nature of the amounts involved, which were sundry credit balances returned back and detailed as expenses in paragraph 33.3. The High Court agreed with the tribunal's conclusion that the explanation was misread and misapplied by the Assessing Officer and the Commissioner. The findings were consistent with the evidence on record, and no error of law was found. Therefore, the High Court dismissed the appeals, stating they lacked merit, and no costs were awarded.

In conclusion, the High Court upheld the tribunal's decision, ruling that the interpretation of the clause in the explanation (baa) for section 80HHC was correct. The tribunal's findings regarding the nature of the amounts as expenses rather than receipts were based on factual analysis and not erroneous. The High Court found no substantial questions of law to warrant further consideration, affirming the tribunal's conclusion and dismissing the appeals for lack of merit.