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2013 (4) TMI 639 - AT - Income TaxDisallowance of deduction u/s 80HHC Two appeals raised - ld. CIT(A) has decided the issue in favour of the assessee by respectfully following the judgment of Hon ble Supreme Court in the case of M/s. Topman Exports & others (2012 (2) TMI 100 SC . Keeping in view the above discussions, we do not find any infirmity in the well-reasoned order passed by the ld. CIT(A). Accordingly, the appeal of the Revenue is dismissed. Both appeals are identical on the grounds arising from the same order of the ld. CIT(A),. In the result, the second appeal of the Revenue is dismissed.
Issues:
- Appeal against the order of the CIT(A), Jammu dated 12.03.2011 for the assessment year 2004-05. - Disallowance of deduction u/s 80HHC. - Impact of the amendment to section 80HHC (2nd Amendment Act, 2005). - Duplicate appeal filed by the Revenue. Analysis: Issue 1: Appeal against CIT(A) Order The Revenue filed two appeals challenging the CIT(A) order for the assessment year 2004-05. The grounds raised in both appeals questioned the deletion of the addition made on account of disallowance of deduction u/s 80HHC. The Revenue contended that the CIT(A) erred in relying on a Supreme Court decision related to deduction when the facts were different. However, after considering arguments from both parties and reviewing the material, the ITAT upheld the CIT(A)'s decision, stating that the CIT(A) correctly applied the Supreme Court judgment in favor of the assessee. Issue 2: Disallowance of Deduction u/s 80HHC The core issue revolved around the disallowance of deduction u/s 80HHC. The ITAT found that the CIT(A) had correctly interpreted the Supreme Court's decision regarding the treatment of profits on the sale of export entitlements. The ITAT, in line with the Supreme Court ruling, directed the Assessing Officer to consider only the profit on the sale of export entitlements and not the entire sale proceeds. Additionally, the ITAT addressed specific disallowances related to miscellaneous expenses, limiting the disallowances to reasonable amounts based on the facts presented. Issue 3: Impact of Amendment to Section 80HHC The Revenue raised concerns about the impact of the amendment to section 80HHC (2nd Amendment Act, 2005) on the disallowance of deduction u/s 80HHC. However, the ITAT's decision focused on the application of the Supreme Court judgment and the correct calculation of profits on the sale of export entitlements, rather than the specific amendment mentioned by the Revenue. Issue 4: Duplicate Appeal The ITAT addressed a procedural issue where the Revenue had mistakenly filed a duplicate appeal for the same assessment year with identical grounds. The ITAT deemed the duplicate appeal as infructuous since the main appeal had already been decided. Consequently, the ITAT dismissed the duplicate appeal filed by the Revenue. In conclusion, the ITAT upheld the CIT(A)'s decision in both appeals, dismissing the Revenue's challenges and affirming the treatment of deductions u/s 80HHC based on the Supreme Court's interpretation. The ITAT also addressed procedural errors by dismissing the duplicate appeal filed by the Revenue.
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