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TMI Blog2016 (6) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... entire receipts on account of transport charges only from the profits eligible for deduction u/s 80IC of the Act. We are of the view that the question as to whether the transport chares on finished goods could be considered as profits derived from an undertaking u/s 80IC of the Act and what is to be excluded as to whether the gross transport charges received or the net transport charges received are highly debatable issues which cannot be resolved in the proceedings u/s 154 of the Act. The CIT(A) has taken note of this principle has followed the decision of the Hon’ble Supreme Court in the case of M/s. Mepco Industries Limited vs CIT [2009 (11) TMI 24 - SUPREME COURT ] wherein the principle that debatable issues cannot be the subject ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act where the gross income of the assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (2), there shall, be allowed, in computing the total income of the assessee, a deduction from such profits and gains, as is specified in sub-section (3) of 80IC of the Act. In the return of income filed for A.Y.2005-06 the assessee claimed deduction a sum of ₹ 11,88,67,798/- as deduction u/s 80IC of the Act. An order of assessment u/s 143(3) was passed by the AO on 31.12.2007 in which the AO reduced the claim of the assessee for deduction u/s 80IC of the Act by a sum of ₹ 24,56,650/-. The aforesaid sum was interest paid to the bank on cash credit account. The AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 204 (Cal) CIT Vs, Meghalaya Steels Ltd. [2011] 332 ITR 91 (Gau), where it has been decided specifically that transport subsidy is not eligible for deduction u/s 80HH or 80IB. 5. The AO thereafter passed an order u/s 154 dated 30.03.2012 excluding the transport charges of finished goods and transport subsidy from the profits derived by an enterprise and revised the deduction u/s 80IC of the Act accordingly. 6. Aggrieved by the order of AO the assessee preferred an appeal before CIT(A). The CIT(A) after considering the submissions of the assessee cancelled the order u/s.154 of the Act. The CIT(A) held that the AO while completing the assessment had consciously allowed the claim of the Assessee for deduction u/s.80-IC of the Act. He a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r withdrawal of deduction under 80IC on transport charges and transport subsidy cannot be considered as mistake apparent from record in terms of section 154 as issue was debatable and cannot be rectified u/s 154 of the IT Act,1961, once he had considered all the relevant facts while accepting the claim of assessee in order dtd.31.12.2007 u/s 143(3). 7. Aggrieved by the order of CIT(A) the revenue has preferred the present appeal before the Tribunal. 8. We have heard the rival submissions. The ld. DR relied on the observations of the AO in the order passed u/s 154 of the Act. The ld. Counsel for the assessee relied on the order of CIT(A). He further brought to our notice the decision of the Hon ble Supreme Court in the case of CIT vs M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transport charges incurred by the assessee namely ₹ 8,43,77,509/-. It is not possible for the AO to exclude the entire receipts on account of transport charges only from the profits eligible for deduction u/s 80IC of the Act. We are of the view that the question as to whether the transport chares on finished goods could be considered as profits derived from an undertaking u/s 80IC of the Act and what is to be excluded as to whether the gross transport charges received or the net transport charges received are highly debatable issues which cannot be resolved in the proceedings u/s 154 of the Act. The CIT(A) has taken note of this principle has followed the decision of the Hon ble Supreme Court in the case of M/s. Mepco Industries L ..... X X X X Extracts X X X X X X X X Extracts X X X X
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