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TMI Blog2004 (6) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... o be taken into account. This way total business receipt were taken at Rs. 3,67,39,021 and deduction was computed as per the following formula:-- 80% of business profit × Export turnover Total turnover The deduction was worked out at Rs. 53,80,416 against Rs. 86,96,634 claimed by the assessee. 3. The Assessing Officer rejected the contention of the assessee that his export unit was at NOIDA and there were separate books of account for the above unit. Only income of above unit was to be taken into account and there was no justification to add income of consultancy unit, which was functioning from Vishal Bhawan, Nehru Place, New Delhi and had separate accounts. The Assessing Officer held that "total business income" was to be taken into account and formula adopted by him was fully justified on the basis of what was provided in section 80HHE of Income-tax Act. Even the assessee had treated all receipts from consultancy as business receipts. 4. The assessee impugned above computation in appeal before the learned CIT(A) and claimed that computation of deduction under section 80HHE made by the Assessing Officer was erroneous. The assessee further raised a ground that deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same cannot be entertained as the assessee failed to furnish in the prescribed form (form No. 56F) along with the return of income, the report of our accountant certifying that the deduction has been correctly claimed in accordance with the provision of section 10A." After getting above remand report, the learned CIT(A) examined arguments advanced before her on behalf of the assessee. She first dealt with claim of the assessee under section 10A which was not raised before the Assessing Officer. She was of the view that the Assessing Officer had proceeded under section 143(3)(i) of Income-tax Act and had addressed the question of deduction under section 80HHE of Income-tax Act. The power of the appellate authority was co-terminus with that of the Assessing Officer. As the Assessing Officer had limited jurisdiction in terms of section 143(2)(i) and 143(3)(i) so was the position of the CIT(A). In the light of above restricted jurisdiction it was not in the jurisdiction of the CIT(A) to entertain fresh claim not arising out of order passed by the Assessing Officer under section 143(3)(i) of Income-tax Act. The learned CIT(A) accordingly refused to entertain the claim of the assessee u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of assessment under section 143(3)(i) cannot be more than that of the Assessing Officer. It was co-terminus. The learned DR further supported the impugned order and referred to the decision of the Hon'ble Kerala High Court in Parry Agro Industries Ltd.'s case (supra). 9. We have given careful thought to rival submissions of the parties. For determining first question relating to non-entertainment of assessee's claim under section 10A of Income-tax Act, we will have to refer to the provisions of section 246A of the Income-tax Act where as per clause (a) of sub-section (1) provides for appeal as under:-- "(a) an order against the assessee, where the assessee denies his liability to be assessed under this Act, or an intimation under sub-section (1) or sub-section (1B) of section 143, where the assessee objects to the making of adjustments, or any order of assessment under sub-section (3) of section 143 or section 144, where the assessee objects to the amount of income assessed, or to the amount of tax determined, or to the amount of loss computed, or to the status under which he is assessed;" It is clear from above that the assessee is entitled to challenge income assessed or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PI. It had filed report on prescribed form 10CCAF along with the return. The report on form 56F required as per section 10A of the Income-tax Act, was submitted before the learned CIT(A) who sent the claim of the assessee to the Assessing Officer. The Assessing Officer verified the claim and sent a detailed report. It is not shown that any condition of section 10A was held to be not fulfilled in the case except failure to file audit report on form 56F "along with the return". It has now been accepted by several High Courts that provision relating to submission of audit report along with return are not mandatory but directory. In this connection, useful reference may be made to the decision of the Hon'ble Calcutta High Court in the case of CIT v. Berger Paints (India) Ltd. (No. 2) [2002] 254 ITR 503 as also the decision of the Hon'ble Kerala High Court in the case of CIT v. G. Krishnan Nair [2003] 259 ITR 727. This objection is not very material. It is not the claim of the revenue that conditions of section 10A were not satisfied in this case. The learned CIT(A) refused to entertain the claim of the assessee as an objection to the entertainment of above claim was raised by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in a case where the assessee is engaged wholly in the business of export out of India of any goods, the deduction granted should be in accordance with section 80HHC(1). The provision is attracted only if the profits are derived by the assessee exclusively from exports and not by indulging in any domestic trade. Sub-section (1) is confined to and specifically relates to export trade. Sub-section (3) thereof indicates the manner of computation of the profits derived from the export of goods out of India where the assessee indulges in domestic trade as well. There is no category of persons who have separate export business even when trading in domestic business. The manner as to how to ascertain the profit from export of goods is only as indicated in sub-section (3) of section 80HHC. Under sub-section (3)(b) the formula for ascertainment would be "the entire business including profits of the entire business multiplied by export turnover divided by entire business turnover including export and non-export." The assessee had tea estates in South India and in Assam. It claimed deduction under section 80HHC of the Act for the relevant assessment year 1989-90. The contention was that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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