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TMI Blog2016 (7) TMI 1322X X X X Extracts X X X X X X X X Extracts X X X X ..... he benefit of deduction u/s 80HHC to the assessee and therefore, we find nothing wrong in the order of Ld. CIT(A) and therefore, the same is upheld. If the assessee is allowed u/s 80HHC then it cannot be allowed deduction u/s 80IB - Held that:- We send this issue back to the file of the AO who shall examine the facts and allow the deduction to the assessee u/s 80HHC as well as u/s 80IB so long as the aggregate amount of deduction does not exceed the amount of profits. Thus, the total amount of deduction allowable to the assessee under both of these sections should be restricted to the amount of profits. Thus, this ground may be treated as partly allowed for statistical purposes. - ITA No. 5513, 5532, 5514, 4078, 4167, 4137, 5528, 5529, 5530, 5531, 5516, 4195, 4214, 4225, 4286, 4057/Mum/2011 - - - Dated:- 27-7-2016 - Amit Shukla (Judicial Member) And Ashwani Taneja (Accountant Member) For the Revenue : G. M. Doss, E. Shreedhar (DR) For the Respondent : P. J. Pardiwalla, Vasanti Patel (AR) ORDER These appeals belong to different assessees of same group arising in different assessment years involving identical issues and therefore these were heard together an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee in part and allowed the benefit of deduction u/s 80HHC to the assessee on the ground that the assessee is entitled for benefit of deduction u/s 80HHC without depending upon actual allowability of deduction u/s 80HHC in the hands of export house and he further held that in any case the export house has been actually allowed the deduction u/s 80HHC, and therefore, on facts also the assessee is entitled for deduction u/s 80HHC. 3.3. Being aggrieved, the revenue filed an appeal before the Tribunal on the ground that Ld. CIT(A) ought not to have allowed the benefit of deduction u/s 80HHC in the light of judgment of Hon ble Supreme Court in the CIT v. IPCA Laboratories Ltd. 266 ITR 521 (SC) wherein it was held that in case there was loss from export activities, then the export house cannot pass on the benefit of deduction u/s 80HHC by way of issue of disclaimer certificate u/s 80HHC (4)(a) to the supporting manufacturer. 3.4. Before us, the Ld. Counsel of the assessee defended and justified the order of Ld. CIT(A) for allowing deduction u/s 80HHC on many grounds. His first argument was that deduction has been actually allowed to the export house i.e. ASL by the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has escaped assessment. This reason to believe on the part of the Assessing Officer has not to be on the basis of change of opinion i.e. where Assessing Officer has had occasion to consider an issue during the assessment proceeding under section 143(3) of the Act. In this case, the Assessing Officer had during the proceeding under section 143(3) of the Act raised queries to the petitioner specifically with regard to petitioner s claim for deduction under section 80HHC of the Act and the petitioner s response to the same was considered by the Assessing Officer while passing the assessment order. Therefore, the impugned notice and the grounds in support thereof are in fact a change of pinion on the part of the Assessing Officer. Therefore, on the aforesaid ground alone impugned notice is not sustainable. 3.5. It is further noted by us that, on merits also Hon ble High Court observed that deduction u/s 80HHC was actually allowable to the said export house the observations of the Hon ble High Court are very useful and these are reproduced hereunder for the sake of ready reference: In any view of the matter, the stand of the petitioner on merits with regard to interest income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be allowed deduction u/s 80IB. During the course of hearing before us it has been fairly submitted by the Ld. Counsel that aggregate amount of deduction allowable to the assessee u/s 80HHC as well as u/s 80IB should not exceed the amount of profits earned. The reliance has been placed in this regard on the judgment of Hon ble Bombay High Court in the case Associated Capsules Pvt Ltd vs. DCIT 322 ITR 42. 4.1. Per contra Ld. DR relied upon the order of the lower authorities. We have gone through the orders passed by the lower authorities as well as judgment of Hon ble Bombay High Court in the case of Associated Capsules Pvt Ltd (supra). In view of judgment of Hon ble Bombay High Court, we send this issue back to the file of the AO who shall examine the facts and allow the deduction to the assessee u/s 80HHC as well as u/s 80IB so long as the aggregate amount of deduction does not exceed the amount of profits. Thus, the total amount of deduction allowable to the assessee under both of these sections should be restricted to the amount of profits. Thus, this ground may be treated as partly allowed for statistical purposes. 4.2. As a result, appeal of the assessee is partly allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mum/2011 for A.Y. 2004-05 12. It is noted that in this year also grounds raised by the assessee in assessee s appeal and ground no.1 of revenue s appeal are identical to AY 2000-01. The AO is directed to follow our order for A.Y. 2000-01. Consequently, ground no.1 of assessee s appeal is allowed and ground no.1 of Revenue s appeal is dismissed. 12.1. Ground No.2 the revenue has challenged the action of Ld. CIT(A) in restoring the issue of disallowance of ₹ 5,000/- u/s 14A as per Rule 8D to the AO. It is noted that Ld. CIT(A) has sent this issue back to the file of the AO. We do not find anything wrong in the order of Ld. CIT(A) and therefore, no interference is called for in the order of Ld. CIT(A) and the same is upheld. 13. As a result, assessee s appeal is allowed and revenue s appeal is dismissed. Now we shall take up appeals of the Assessee Revenue in the case of Frigorifico Allana Limited in ITA No.4078/Mum/2011 ITA No.5513/Mum/2011 for A.Y. 2002-03: 14. It is noted that in this case the issues raised are absolutely identical. The export house is same i.e. M/s. Allanasons Ltd. No distinction has been brought out by the either party on the facts or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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