9911796707
TMI Blog1998 (9) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... ed representative submits that decision of the Tribunal Calcutta Bench in the case of Chloride India Ltd. vs. Dy. CIT (1995) 53 ITD 180 (Cal), wherein it has been held that sales-tax and excise duty cannot be included in the total turnover for the purposes of computing deduction under s. 80HHC. It was also submitted that the CIT(A) has erred in rejecting the submissions of the assessee that according to the method of accounting adopted by it, sales-tax and excise duty recovered from the customers was shown separately in the sales invoices and was credited separately to separate accounts relating to sales-tax and excise duty and that the amount paid to the concerned authorities was debited to these separate accounts and therefore they cannot form part of the total turnover as explained in the guide notes on the subject issued by the Institute of Chartered Accountants of India. It was also submitted that the CIT(A) has erred in placing reliance upon various decisions wherein it has been held that sales-tax excise duty is a trading receipt but nowhere it has been held that these receipts form part of the total turnover for the purpose of s. 80HHC. 1.3. The learned Departmental Repres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d would not reflect the policy of the legislature. 1.6. The Tribunal relied upon the decision of the Supreme Court in the case of Bajaj Tempo Ltd. vs. CIT (1992) 104 CTR (SC) 116 : (1992) 196 ITR 188 (SC), to the effect that a provision intended for promoting growth had to be interpreted liberally so as to advance the objectives of the section and not to frustrate it and CIT vs. Straw board Manufacturing Co. Ltd. (1989) 77 CTR (SC) 75 : (1989) 177 ITR 431 (SC), to the effect that while interpreting a provision providing for concessional rates of tax for the purpose of encouraging industrial activity, a liberal construction should be put upon the statute. Having regard to the objectives of s. 80HHC, the Tribunal held that the expression "total turnover" could not include the octroi, sales-tax and excise duty on legal sales since the expression "export turnover" did not include these ingredients. 1.7. Since s. 80HHC is intended to encourage exports, it should be interpreted in a liberal manner which advances the objective of encouragement of exports, and not in a manner which defeats or frustrates the purpose. The two Supreme Court decisions of Bajaj Tempo Ltd. and Strawboard Manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned authorised representative submits that the CIT(A) has erred in holding that the AO was right in including Rs. 13,12,706 being receipts from Kherthala contract as forming part of the total turnover for the purpose of computing deduction under s. 80HHC. The AO included the receipts from contract business as part of total business receipt on the ground that assessee is indulging in contract business over the years regularly and showing income therefrom. This action of the AO is confirmed by the CIT(A). 2.2. The learned authorised representative however, argues that Kherthala contract was a separate activity and has nothing to do with the business of export of goods manufactured by the assessee and, therefore, that receipt should not be considered as part of the total turnover. It was also argued that CIT(A) erred in not appreciating that the income from this contract was shown in the audited accounts under the head "Other income" and not part of the sales turnover and, therefore, the receipt should not be considered as part of the total turnover. 2.3. The learned Departmental Representative on the other hand, drew our attention to the discussions made by the CIT(A) in para 1.6 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st Appellate Authority has declined to accept the argument of the assessee. He has observed: "I find that this is only a notional loss and not the real loss. The appellant was supposed to credit the export turnover by advance adjusted @ 17 per Dollar plus the balance amount receivable by converting it @ Rs. 30 per Dollar. If this method is adopted then the export turnover as well as total turnover will be reduced by Rs. 18,11,345. Therefore, the action of the AO is justified." 3.3. After hearing both the parties, we are of the opinion that the assessee has contracted to supply the goods manufactured by it and valued the same in US Dollars. Advance received was also in US Dollars. Bills prepared by the assessee were also in US Dollars. While preparing the final bill, the assessee reduced the amount of bill by $ 25 in each consignment of 50 MT as per the agreement between them. There is, therefore, no loss on this account. Besides, if there is any loss, it would reflect in the total turnover. The methodology adopted by the assessee for claiming the loss is, therefore, held as unreasonable or unjustified. We, therefore, decline to interfere on this account. 4. The next ground of app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire structure was an integral part of the weigh-bridge on which depreciation was allocable at the rate applicable to plant and machinery should have been allowed. 5.1. In this connection, the learned authorised representative also relies upon the decision of the Jurisdictional High Court in the case of CIT vs. Ispat Ltd. (1995) 124 CTR (Raj) 19 : (1994) 210 ITR 1018 (Raj) wherein it has been held that cost of the structure required to make the cranes operative form part of the cost of crane and depreciation should be allowed at the rate of applicable to plant and machinery. Besides, the learned authorised representative also relied upon the decision CIT vs. Hotel Luciya (1998) 147 CTR (Ker) (FB) 322 : (1998) 231 ITR 492 (Ker) (FB). 5.2. On the other hand, the learned Departmental Representative strongly relied upon the order of the CIT(A). 5.3. The facts of this ground of appeal reveal that AO considered the building and weigh-bridge two separate things and accordingly depreciation was allowed. The weigh-bridge shed was constructed to protect the weighing scale from vagaries of weather. The CIT(A), therefore, held that the shed has nothing to do with the functioning of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
