2006 (2) TMI 155

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..... also claimed refund of expenditure tax. According to the assessee the reason for non-inclusion of the above amounts was, that these collections were not routed through the profit and loss account. The Assessing Officer held that (i) since the liability to pay these taxes arose on account of the assessee carrying on the business, the receipts form part of the total turnover; and (ii) with regard to the refund of expenditure tax, since the assessee had been following the mercantile system of accounting, the excess collection was made assessable on accrual basis. Thus, the Assessing Officer has also taken the refund as the assessee's income to form part of the total turnover. Aggrieved by the order of the Assessing Officer, the assessee pref .....

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..... bunal was right in holding that expenditure tax, luxury tax and sales tax should not be included in the total business receipts of the assessee for the purpose of computation of deduction under section 80HHD? (ii) Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the refund of expenditure tax will not form part of the income of the current year?" Issue No.1: "Whether, on the facts and circumstances of the case, the Tribunal was right in holding that expenditure tax, luxury tax and sales tax should not be included in the total business receipts of the assessee for the purpose of computation of deduction under section 80HHD? In this regard, it is apt to refer to the decision of this court in C .....

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..... rage in the definitions given thereunder, it has to be given a restrictive meaning while computing the 'export profit' for the purposes of section 80HHC, namely, only that part of the receipt for sale consideration is to be taken as part of the total turnover which has an element of profit therein, and, accordingly, the receipts of excise duty and sales tax which do not include an element of profit should be excluded from the 'total turnover'.": Issue No.2: "Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the refund of expenditure tax will not form part of the income of the current year?" On a perusal of the records, it is seen that based on the materials available on record, the Tribunal f .....

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