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TMI Blog2010 (5) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... et utensils and other products. On 12-11-2003, the assessee filed its Income-tax return disclosing a taxable income of Rs. 1,51,330, after claiming deduction under section 80HHC, in respect of export profits, amounting to Rs. 49,16,854. The Income-tax return was duly accompanied by the profit and loss account and other financial statements, audit report, certificate under section 10CCAC etc. This Income-tax return was picked up for scrutiny assessment. The assessee attended these scrutiny assessment proceedings, produce the books of account in response to notice under section 142(1) dated 25-10-2004, and complied with the requisitions of the Assessing Officer from time-to-time. On 31-1-2006, the Assessing Officer finally passed an assessment order accepting the income returned by the assessee, and, in the assessment order so passed, inter alia, observed as follows : "On going through the profit and loss account, it is seen that the assessee has earned an amount of Rs. 61,53,537 on Export Licences sales. As per section 28( iiia ) of the Income-tax Act, profit on sale of licences granted under the Import (Control) Order, 1955, made under the Imports Exports (Control) Act, 1947 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ictional High Court". It was also pointed out that "the claim of the assessee was in accordance with one of the views expressed by various Benches of the Tribunal". A list of Tribunal decisions, which supported the computation by the assessee, was also filed. These submissions of the assessee did not dissuade the Assessing Officer and he apparently referred the matter to the Commissioner for exercising powers under section 263. On 31-7-2007, the assessee was required to show cause as to why the Commissioner should not exercise his revision powers under section 263 and thus revise the deduction granted to the assessee under section 80HHC. In response to this show-cause notice, the assessee once again referred to and mainly relied upon his rather elaborate written submissions dated 16-7-2007 filed before the Assessing Officer. None of these submissions impressed the learned Commissioner either. Learned Commissioner set out the amended provisions of section 80HHC, and noted that while the assessment was completed on 31-1-2006, the process of retrospective amendment in section 80HHC was completed in December 2005. The Assessing Officer was thus required to apply the amended provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an 623, and various decisions of the co-ordinate Benches including in the cases of Honda Siel Power Products Ltd. v. CIT [2007] 295 ITR 466 and Usha Martin Industries Ltd. v. Dy. CIT [2003] 86 ITD 261 (Kol.). It is contended that when Assessing Officer has taken a possible view of the matter, the view so taken by him cannot be disturbed merely because the Commissioner does not agree with that view. It is also contended that view of the audit party cannot be a basis for exercise of powers under section 263, and that merely because the assessment order does not refer to the queries raised by the Assessing Officer, it cannot be said that there was no enquiry and the assessment is erroneous and prejudicial to the interests of the revenue. On the strength of these erudite arguments, Dr. Shivram, learned counsel for the assessee, urges us to quash the revision proceedings. Shri Balodia, on the other hand, painstaking takes us through the amended legal provisions with a view to demonstrate that the Assessing Officer did not correctly apply the correct law. It is also stated that once the view taken by the Assessing Officer is not based on correct reading of simple legal provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the issue, but then none of those judicial precedents relate to the legal position post the retrospective amendments made in 2005, in section 80HHC. It is also contended by the assessee that as at the time of filing of the Income-tax return, there were conflicting views of different judicial authorities, but when we are examining whether or not the order of the Assessing Officer was erroneous, it has to be qua the legal position prevailing at the time of order being passed and not qua the legal position prevailing at the time of filing of Income-tax return. The legal position prevailing at the point of time when order sought to be revised was passed did not, in our considered view, admit any ambiguity or controversy that the profits computed under clause ( a ) or clause ( b ) or clause ( c ) under section 80HHC(3) or after giving effect to the first proviso, as the case may be, "shall be further increased by the amount which bears to ninety per cent of any sum referred to in clause ( iiid ) or clause ( iiie ), as the case may be, of section 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee". That was not do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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