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2016 (4) TMI 245 - AT - Income TaxDeduction u/s.80HHC - Held that - The issue is covered by the decision of the Hon ble Supreme Court in the case of CIT Vs. Avani Export 2015 (4) TMI 193 - SUPREME COURT as well as in the case of Topman export (2012 (2) TMI 100 - SUPREME COURT OF INDIA ). The ld.AO is directed to grant deduction under section 80HHC of the Act. - Decided in favour of assessee
Issues involved:
Cross-appeals by the assessee and the Revenue against the CIT(A)-V order for the Asstt.Year 2003-2004; Dismissal of Revenue's appeal by ITAT due to low tax effect; Assessee's appeal allowed for statistical purpose following ITAT Special Bench decision; Challenge by department in Hon'ble Gujarat High Court; Disposal of appeal by Hon'ble Gujarat High Court along with other appeals; Assessee's appeal before Hon'ble Supreme Court; Decision by Hon'ble Supreme Court remitting the matter to ITAT. Analysis: 1. The cross-appeals by the assessee and the Revenue were against the order of the CIT(A)-V for the Asstt.Year 2003-2004. The ITAT dismissed the Revenue's appeal due to the low tax effect involved, while the assessee's appeal was allowed for statistical purpose following the ITAT Special Bench decision. The department challenged the issue before the Hon'ble Gujarat High Court, which disposed of the appeal along with other appeals. 2. Subsequently, the assessee appealed before the Hon'ble Supreme Court, which decided the matter by remitting it back to the ITAT. The Hon'ble Supreme Court directed the ITAT to consider the appeal in accordance with the law laid down in the case of Topman Exports Vs. Commissioner of Income Tax. The order of the Hon'ble Gujarat High Court was set aside, and the matter was to be reconsidered by the ITAT. 3. The ITAT noted that the issue in the appeal of the Revenue was not taken up before the Hon'ble Gujarat High Court or the Hon'ble Supreme Court. The dispute revolved around the addition made by the AO on the ground of payment of employer's contribution towards PF after the expiry of the limitation. The ITAT also considered subsequent developments, including the decision in the case of CIT Vs. Avani Exports and Topman Exports Vs. ITO, to grant relief to the assessee regarding deduction under section 80HHC. 4. The ITAT found that the AO's order after the Hon'ble Gujarat High Court's decision was unwarranted, and the subsequent proceedings should not have been undertaken. The ITAT observed that the Hon'ble Supreme Court's decision rendered the exercise academic, as the matter was remitted back to the ITAT for consideration in light of the Topman Exports case. 5. On merit, the ITAT directed the AO to grant the deduction under section 80HHC to the assessee, as per the decision of the Hon'ble Supreme Court in the case of CIT Vs. Avani Exports. The ITAT allowed the appeal of the assessee, noting that the issue was covered by the relevant judgments. 6. The Revenue's appeal did not reach the Hon'ble Supreme Court and was not remitted to the ITAT. The original order of the ITAT regarding the Revenue's appeal was not disturbed, and the appeal was disposed of accordingly. The ITAT allowed the assessee's appeal while making no observations regarding the Revenue's appeal. In conclusion, the ITAT's detailed analysis and consideration of the legal precedents led to the allowance of the assessee's appeal and the disposal of the Revenue's appeal as per the directives of the Hon'ble Supreme Court and the relevant legal provisions.
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