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2019 (3) TMI 474 - AT - Income TaxDeduction u/s 80HHC on sale to Export House, M/s.Abad Exports Private Limited - goods sold to the Export House - HELD THAT - The Export House had issued disclaimer certificate in Form No.10CCAB dated 22.12.2004, along with copy of revised CA certificate in Form No.10CCAC dated 23.02.2005. There is also evidence on record that the Export House, M/s.Abad Exports Private Limited had not claimed deduction u/s 80HHC with regard to export of goods manufactured by the assessee. Therefore, the assessee undoubtedly, is entitled to deduction u/s 80HHC of the I.T.Act with regard to goods sold to the Export House, M/s.Abad Exports Private Limited. As noticed that deduction u/s 80HHC claimed by the assessee on account of sale to Export House, M/s.Abad Exports Private Limited which is in excess of the profits earned by the Export House. Therefore, for the limited purpose of quantification of deduction u/s 80HHC of the I.T.Act, the issue is restored to the Assessing Officer Claim u/s 10A - claim for unexpired period, i.e., assessment year 2002-2003 in respect of exports to Exports House other than IQF individual Quick freezing - HELD THAT - Going by ABAD EXIM (P) LTD. 2018 (8) TMI 985 - KERALA HIGH COURT the assessee would be entitled to the claim of deduction u/s 10A of the I.T.Act for the unexpired period, i.e., assessment year 2002-2003 in respect of exports to Exports House other than IQF. The quantification of the amount that the assessee is entitled for deduction u/s 10A of the I.T.Act for the relevant assessment year has to be computed by the Assessing Officer for the reason that the Hon ble High Court had stated that the claim of IQF, deduction u/s 10A of the I.T.Act cannot be granted. So also, there shall not be overlapping of deduction u/s 10A and 80HHC of the I.T.Act with regard to the same export (i.e. export made to Export House, M/s. Abad Exports Private Limited). Therefore, for the limited purpose of computation of deduction u/s 10A of the I.T.Act, the issue is restored to the Assessing Officer. It is ordered accordingly. - Appeal filed by the Revenue is allowed for statistical purposes.
Issues:
1. Deduction u/s 80HHC of the I.T.Act 2. Claim u/s 10A of the I.T.Act Deduction u/s 80HHC of the I.T.Act: The dispute arose regarding the deduction u/s 80HHC, initially disallowed by the Assessing Officer but later allowed by the first appellate authority. The Income Tax Appellate Tribunal found that the decision in the case of IPCA Laboratories Ltd. was not applicable as both the supporting manufacturer and the export house had profits. The Hon’ble High Court agreed with the ITAT's finding but remanded the matter back for verification of the export house's profits. Upon submission of relevant documents, it was established that the export house had profits, entitling the assessee to the deduction u/s 80HHC. However, the deduction amount claimed was in excess of the export house's profits, leading to a restoration of the issue to the Assessing Officer for quantification. Claim of deduction u/s 10A of the I.T.Act: Regarding the claim u/s 10A, the Hon’ble High Court held that undertakings entitled under the earlier provision would continue to be entitled under the new provision for the unexpired period of entitlement. The Tribunal did not address this issue in its earlier order, and the Revenue did not raise it in their appeal. The High Court ruled that the assessee was not entitled to claim u/s 10A for exports involving Individual Quick Freezing (IQF). However, the assessee was entitled to the deduction for the unexpired period of entitlement for exports to Export House other than IQF. The issue was restored to the Assessing Officer for computation, ensuring no overlapping of deductions u/s 10A and 80HHC for the same export. The appeal by the Revenue was allowed for statistical purposes. In conclusion, the judgment clarified the eligibility of the assessee for deductions u/s 80HHC and 10A of the I.T.Act based on the profitability of the export house and the nature of exports. The decision emphasized adherence to legal provisions and previous court rulings to determine the entitlement to tax deductions, ensuring accurate quantification and preventing overlapping deductions for the same transactions.
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