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TMI Blog2014 (4) TMI 1012X X X X Extracts X X X X X X X X Extracts X X X X ..... l question of law – Decided against Revenue. Inclusion of amount of reimbursement of medical expenses – Held that:- The Tribunal found that the matter is squarely falling within the statutory provision u/s 40A(5) of the Act - A direction to the AO to exclude medical expenses/ club subscription /entrance fees from the salary of the employees for computing disallowance u/s 40A(5) of the Act does not give rise to any substantial question of law – Decided against Revenue. Computation of deduction u/s 80HHC of the Act – net foreign exchange receipt relating to export from Kandla Free Trade Zone to be considered as receipt u/s 10A of the Act or not – Held that:- The Tribunal held that sub-section (1) only stipulates that the assessee should be an Indian Company, resident in India and engaged in the business of export out of India of any goods or merchandise to which the section applied - merely because deduction u/s 10A was claimed by the assessee on such exports would not be a reason for dis-entitling it to claim deduction u/s 80HHC(1) (Clause a) of the Act - the relief has been confined to net foreign exchange realization in the form of export from Kandla Free Trade Zone – the is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s extensive reference not only to the statutory provision, facts all of which are identical but also the order of this Court in the case of Geoferry Manners Co.Ltd. . In such circumstances, we do not think that question (A) is a substantial question of law. 4. In so far as question (B) is concerned, it is submitted that the assessee changed its stand. The assessee had accepted the view taken in favour of the department and which was against it. However, in the impugned order the Tribunal allowed the assessee to change its stand and relying upon the explanation 2 to Section 37(2A) of the Income Tax Act,1961. 5. We have perused the order passed by the Tribunal and what we have noted is that the assessee had urged before the Tribunal that the Assessing Officer had erroneously disallowed the claim. The Tribunal has also noted the objection of the Revenue that in the preceding years disallowance done on 41% of the total expenditure relating to staff get-togethers and conferences were confirmed by the Tribunal vide para 8.2 of its order dated 3.7.2008 in ITA No.5067/B/90. That was in relation to the same assessee. However, what the assessee contended before the Tribunal is that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... third question is concerned, that is inclusion of amount of reimbursement of medical expenses, in relation to that though it is urged that the appeal raises substantial question of law what we have noted from the order of the Tribunal is that the Tribunal extensively referred to the stand of the respective parties. The issue was decided in favour of the assessee by the Tribunal for assessment year 1983-84, 1984-85, 1985-86 and 1986-87. The position was not disputed by the Revenue. The issue of inclusion of repairs and maintenance of company owned/ leased residential premises was never raised. The matter was only of inclusion of medical expenses, club subscription/ entrance fees. The Tribunal found that this matter is squarely falling within the statutory provision under Section 40A(5) of the Income Tax Act,1961. If the view taken by the Tribunal is in the case of very assessee and for the prior assessment year, so also on facts, then, it does not give rise to any substantial question of law. A direction to the Assessing Officer to exclude medical expenses/ club subscription /entrance fees from the salary of the employees for computing disallowance under Section 40A(5) of the Act, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alaysia to Middle East, the deduction from sub-section (1) of the statutory provision as it then stood is when an assessee being an Indian Company exports out of India during the previous year relevant to assessment year any goods or merchandise, then there shall be and in accordance with the provisions so also subject to the section, from the total income of the assessee, a deduction of an amount equal to the aggregate of 4% of the net foreign exchange realization and 50% of the profits derived by the assessee from the export of such goods or merchandise as exceeds the amount referred to in clause (a) of sub-section (1) of Section 80HHC of the Income Tax Act,1961. The Tribunal held that sub-section (1) only stipulates that the assessee should be an Indian Company, resident in India and engaged in the business of export out of India of any goods or merchandise to which the section applied. Four percent of the net foreign exchange realization referred to, is not restricted to the exports out of India. There is nothing in the language of this provision which enables the Tribunal to uphold the view of the Assessing Officer. The Tribunal also found that this provision does not speak of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order passed in the case of the very assessee for the assessment year 1986-87. The Tribunal followed the decision of this Court in the case of CIT Vs. Sudarshan Chemical Industries Ltd., (245 ITR 769) and the judgment of the Hon'ble Supreme Court in the case of CIT Vs. Lakshmi Machine Works, (290 ITR 667) . Though it is submitted that the order of the Tribunal is not said to be conclusive as far as the current year or assessment year in question, what we find is that the Tribunal has considered the grievance of the assessee that the Assessing officer excluded from the total turn over excise duty and recovery of distribution costs credited to the distribution expenses while computing its eligible deduction under Section 80HHC of the Act. Therefore, the matter of exclusion of excise duty was squarely raised in the assessment year 1986-87, equally, recovery of distribution costs credited to the distribution expenses In these circumstances, we do not find that the view taken by the Tribunal raises the substantial question of law. In addition, the Tribunal has assigned reasons that indirect taxes like excise duty and sales tax would not form part of total turnover for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X
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