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2017 (7) TMI 816 - HC - Income TaxReopening of assessment - Deduction under Section 80HHC without taking into account the trading loss - Held that - In case of M/s.Allana Sons Ltd. 2015 (2) TMI 992 - BOMBAY HIGH COURT this court has observed that the amendment to Section 80 HHC(3) is with retrospective effect and the same was decided in favour of M/s.Allana Sons Ltd. M/s.Allana Sons Ltd. has been granted the benefit of deduction and these petitioners being supporting manufacturers also would be entitled for the same. view of the above, the very basis for issuance of notice is on an erroneous premise. - Decided in favour of assessee.
Issues:
Challenge to notice under Section 147 by Revenue. Claim for deduction under Section 80HHC without considering trading loss. Entitlement of supporting manufacturers for deduction based on export house's eligibility under Section 80HHC. Analysis: The High Court of Bombay heard petitions challenging notices issued by the Revenue under Section 147. The petitioners, supporting manufacturers, had claimed a deduction under Section 80HHC without factoring in trading loss. The reason for the reassessment was the alleged ineligibility of the export house, Allana Sons Ltd., for the deduction under Section 80HHC. The court noted that a previous judgment had ruled in favor of M/s. Allana Sons Ltd. regarding the retrospective effect of an amendment to Section 80 HHC(3), entitling them to the deduction. As a result, the supporting manufacturers, including the present petitioners, were also deemed eligible for the deduction. The Revenue's counsel did not contest this legal position, leading the court to conclude that the notice issuance was based on an erroneous premise. The court, considering the above circumstances, quashed and set aside the impugned notices, ruling in favor of the petitioners. The rule was made absolute, and no costs were awarded in the matter. This judgment clarifies the entitlement of supporting manufacturers to deductions under Section 80HHC based on the eligibility of the export house, emphasizing the importance of legal precedents and retrospective application of statutory provisions in tax matters.
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