9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (4) TMI 308 - AT - Income TaxDeduction/ claim under section 80 HHC - non netting of the loss of trading export with profit from manufacturing export - Held that - We find that at the time of filing of return there was ambiguity about netting off of profits/loss of the Export trada/businesses, that during the course of hearing the assessee agreed that it had no objection if the matter was decided in the light of the judgment of IPCA Laboratories(2004 (3) TMI 9 - SUPREME Court ), then later on retrospective amendment was introduced with regard to section 80HHC of the Act, that in the case of Avani Exorts (2015 (4) TMI 193 - SUPREME COURT ), the Hon'ble Supreme Court has laid down certain guidelines. We find that all such material was not available to the AO/FAA when they had passed the assessment order/appellate order. As they did not have the benefit of important legislation, so in the interest of justice, we are remitting back the file to the AO for fresh adjudication. The AO is directed to decide the issue afresh after affording reasonable opportunity of hearing to the assessee - Decided in favour of assessee in part by way of remand.
Issues:
1. Deduction/claim under section 80 HHC of the Act. Analysis: The Appellate Tribunal ITAT Mumbai addressed the issue of deduction/claim under section 80 HHC of the Income Tax Act. The Assessee, a company engaged in manufacturing and trading exports, filed its return of income, declaring total income. The Assessing Officer (AO) completed the assessment, determining the income of the assessee. The primary ground of appeal was related to the deduction under section 80 HHC. The AO found that the assessee had incurred a loss from trading export and earned a profit from manufacturing export. The AO netted off the loss from trading export against the profit from manufacturing export, resulting in a net loss figure. Consequently, the AO did not allow the deduction claimed by the assessee. The assessee appealed before the First Appellate Authority (FAA), arguing that it had total turnover from exports and claimed a deduction under section 80 HHC. The FAA upheld the AO's order, stating that there was a net loss from the export operations of the assessee and that the segregation of manufacturing or trading activities for deduction under section 80 HHC was not acceptable. The FAA concluded that the deduction did not arise as the income from the export business was negative. The FAA's decision was based on the judgment in the case of IPCA Laboratories. During the appeal before the Appellate Tribunal, the Authorized Representative (AR) highlighted the retrospective amendment to section 80 HHC, allowing netting off of export incentives against the loss. Referring to the Supreme Court's decision in Avani Exports, the AR argued for the retrospective application of the amendment. The Tribunal observed that important legislation and judgments were not available to the AO/FAA at the time of assessment, and in the interest of justice, remitted the file back to the AO for fresh adjudication. The AO was directed to decide the issue after providing a reasonable opportunity of hearing to the assessee, partially favoring the assessee on Ground No. 1. In conclusion, the appeal filed by the assessee was allowed in part, and the case was remitted back to the AO for fresh adjudication considering the retrospective amendment and relevant judicial decisions. Order pronounced in the open court on 6th April 2016.
|
