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TMI Blog2015 (3) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... er", therefore, the proceeds of sale of such scrap would not be included in "sales" in the profit and loss account of the assessee.The assessee was not primarily dealing in scrap but was a manufacturer of 'shoe uppers'. So, only the sale proceeds from sale of 'shoe uppers' would be treated as its turnover, as per the normal accounting practice profits. The income derived from the sale of scrap would not be included in the total turnover and the same will have to be reduced from the cost of the raw material.See Commissioner of Income Tax Vs. Punjab Stainless Steel industries (2014 (5) TMI 238 - SUPREME COURT) Reopening of assessment - Held that:- The proceedings under section 148/147 of the Act were not required as no fre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax Appeal No.88 of 2002, one more question of law was admitted, which is as under:- Whether on the facts and circumstances of the case, particularly that a period of 4 years had passed, after the regular assessment had been made in the instant case under Section 143(3) of the Act, (after full examination of all related facts as had been fully and truly disclosed by the assessee), notice under Section 147 could have been validly issued without having any regard to the proviso thereto. 4. The brief facts of the case are that during the assessment year under consideration, assessee's firm was engaged in the business of manufacture of 'shoe uppers' for export. The assessee's firm was 100% export unit, it has maint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counts and the same was reduced from the cost of raw material. He also submits that universally accepted accounting standards in the matter of accounting of 'recovery' of cost through sale of self-generated scrap, had duly been followed by the assessee year after year and the Department had accepted the same. The entire proceeds on account of sale of scrap, stood duly reflected in the related Profit Loss account. It is also the submission of the learned counsel that there was no occasion to initiate proceedings under Sections 148/147 of the Act by the A.O.. Finally, it is submitted by the learned counsel that the cost of the sale proceeds of scrap will have to be reduced from the cost of the raw material. 7. On the other hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income Tax Vs. Punjab Stainless Steel industries (2014) 364 ITR 144 SC has observed that:- 28. The intention behind the enactment of section 80HHC of the Act was to encourage export so as to earn more foreign exchange. For the said purpose, the Government wanted to encourage businessmen, traders and manufacturers to increase the export so as to bring more foreign exchange in our country. If the purpose is to bring more foreign exchange and to encourage export, we are of the view that the Legislature would surely like to give more benefit to persons who are making an effort to help our nation in the process of bringing more foreign exchange. If a trader or a manufacturer is trying his best to increase his exports, even at the cost of h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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