9911796707
TMI Blog2014 (6) TMI 531X X X X Extracts X X X X X X X X Extracts X X X X ..... . 95-96 on 31.03.1997 declaring total income of RS. Nil. The total income was assessee at Rs. 26,16,174/- vide order dated 23.03.1998 passed under section 143(3) of the Act. Aggrieved by the order of A.O, Assessee preferred the appeal before CIT(A) who vide order dated 08.11.2000 partly allowed the appeal. Aggrieved by the order of CIT(A), Revenue preferred appeal before Hon'ble ITAT. Hon'ble ITAT vide order dated 05.01.2007 (ITA NO. 376/AHD/2001) directed the A.O to decide afresh the issue of deduction under section 80HHC in respect of advance licence. Pursuant to the directions of Tribunal, A.O vide order dated 26.12.2008 passed under section 143(3) r.w.s 254 of the Act determined total income at Rs. 26,16,174/-. Aggrieved by the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Once the amount has been treated as income from business and profession within the meaning of section 28(iii)(c) of the Act, the deduction u/s 80HHC is required to be worked out on the basis of the formula laid down in the section and the judicial pronouncement explaining such provisions. 5.5 It is seen that the A.O has rightly worked out deduction u/s 80HHC of the Act keeping in view the conditions laid down in the fifth Proviso inserted in the section below subsection (3) through the Taxation Laws (Amendment) Act 2005 with retrospective effect 1.4.1992. The Ld. A.R's claim that deduction u/s 80HHC shall be worked out after ignoring the loss determined in respect of exports is not valid after the insertion of the fifth Proviso i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses not received but for which the application was made. He further submitted that mere holding of advance license at the year end does not result into accrual of income and the income is said to accrue when legal and enforceable right is acquired by the Assessee. He further submitted that after 31.03.1995 due to financial crunch and pollution control, the Assessee did not continue the process of manufacturing and it therefore surrendered the advance licenses to the appropriate authority. He further submitted that Assessee has not earned any profit in future on the sale of advance license. He also placed on record the copy of the submission made to the relevant authorities about the surrendering of licenses. He further placed reliance on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enefits under the advance licences as well as under the duty entitlement pass book, there was no corresponding liability on the customs authorities to pass on the benefit of duty free imports to the assessee until the goods were actually imported and made available for clearance. The benefits represent, at best, a hypothetical income which may or may not materialize and its money value is therefore not the income of the assessee. Applying the three tests laid down by various decisions of court, namely, whether the income accrued to the assessee is real or hypothetical; whether there is a corresponding liability of the other party to pass on the benefits of duty free import to the assessee even without any imports having been made; and the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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