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Issues Involved:
1. Deduction claim under section 80-O of the Income-tax Act, 1961 for assessment years 1979-80, 1980-81, and 1982-83. 2. Powers of the Assessing Officer on remand. 3. Weighted deduction under section 35B of the Income-tax Act, 1961. 4. Charge of interest under section 217 and section 215 of the Income-tax Act, 1961. 5. Initiation of penalty proceedings under section 273(a) of the Income-tax Act, 1961. Detailed Analysis: 1. Deduction Claim under Section 80-O: - Assessment Years 1979-80 and 1980-81: - The lower authorities disallowed the deduction claims under section 80-O, reasoning that the assessee-company had not put forward true and correct facts before the Central Board of Direct Taxes (CBDT), particularly regarding sub-contracting of certain jobs abroad. - The assessee argued that the approval granted by the CBDT dated 4th April 1978 was based on correct facts, and any omission was bona fide. - The Tribunal found that the CBDT's letter dated 19th August 1987 corroborated the assessee's stand, stating that the non-disclosure of the appointment of the third sub-contractor was a bona fide omission. - The Tribunal concluded that the disallowance by the Assessing Officer was not in accordance with the law and restored the relief allowed to the assessee under section 80-O as per the original assessment order dated 25-9-1982. - Gross vs. Net Income for Deduction: - The Tribunal referred to Circular No. 341 dated 10-5-1983, which clarified that the Supreme Court's decision in Cloth Traders' case applied to assessments up to and inclusive of the assessment year 1980-81. - The Tribunal held that for assessment years 1979-80 and 1980-81, the deduction under section 80-O should be allowed on the gross amount. - Assessment Year 1982-83: - The Tribunal adopted the reasoning of the CIT (Appeals) and held that the assessee failed to provide a clear stand on the expenses to be taken on a pro-rata basis. 2. Powers of the Assessing Officer on Remand: - The Tribunal analyzed the remand orders and concluded that the remand was limited to specific issues, particularly the claim under section 35B, and not the entire assessment. - The Tribunal held that the Assessing Officer could not disturb the relief granted under section 80-O in the second round of litigation, as it was not a subject matter of appeal in the first round. 3. Weighted Deduction under Section 35B: - Assessment Year 1979-80: - The CIT (Appeals) upheld the deduction allowed by the Assessing Officer, following the decision in the case of J. Hemchand & Co. - The Tribunal found no material to warrant interference with the CIT (Appeals)'s decision. - Assessment Year 1980-81: - The Tribunal rejected the assessee's additional claim for weighted deduction under section 35B for the same reasoning as for the assessment year 1979-80. - Assessment Year 1982-83: - The Tribunal set aside the orders of the lower authorities on this limited issue and directed the Assessing Officer to decide the claim afresh, considering the assessee's letter dated 14-2-1985. 4. Charge of Interest: - Section 217 (Assessment Year 1979-80): - The Tribunal modified the CIT (Appeals)'s directions to be effective for the assessment year under appeal as well. - Section 215 (Assessment Year 1982-83): - The Tribunal found that the CIT (Appeals) did not afford an opportunity of being heard to the assessee regarding the levy of interest under section 215. - The Tribunal set aside the CIT (Appeals)'s order on this limited issue and directed a fresh decision after hearing the assessee. 5. Initiation of Penalty Proceedings under Section 273(a): - Assessment Year 1982-83: - The Tribunal noted the assessee's stand that the assessment order did not contain any order for initiation of penalty proceedings. - The Tribunal directed the CIT (Appeals) to decide the issue afresh, allowing the assessee and the Assessing Officer to be heard. Conclusion: - Assessment Year 1979-80: The appeal succeeded partly, with the Tribunal restoring the relief allowed under section 80-O and upholding the weighted deduction under section 35B. - Assessment Year 1980-81: The appeal succeeded partly, with the Tribunal allowing the deduction under section 80-O on the gross amount. - Assessment Year 1982-83: The appeal succeeded partly for statistical purposes, with the Tribunal remanding the issues of weighted deduction under section 35B and the charge of interest under section 215 for fresh consideration.
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