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TMI Blog1985 (12) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... account of medical benefits, expenditure on house rent allowance and personal Accident Insurance premium of Managing Directors should not be considered for the disallowance under s. 40(C) of the Act." 4. At the time of hearing, the ld. counsel for the assessee pointed out that while deciding this issue in favour of the assessee, the CIT(A) has relied on the order of the Tribunal (Special Bench) as well as the decision of the Hon'ble Delhi High Court mentioned in his order. He therefore, urged that we should uphold the order of the CIT (A) on this point. Faced with this position, the ld. representative for the Department submitted that the Revenue has taken up this ground as it has not accepted the order of the Tribunal (Special Bench) as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er s. 80HHC on account of export turnover is put forward at the time of hearing vide letter dt. 23rd Feb., 1984. The computation of the business income shows a loss and in fact the total income comprises of long term capital gain only. Sec. 80HHC falls under Chapter VI-C under the heading "Deductions in respect of certain incomes" and therefore it envisages deduction from income from export business. Sec. 80AB also provides for deduction under Chapter V-IC in respect of any income of the nature specified in that section which is included in gross total income of the assessee. In view of this, the claim for deduction under s. 80HHC is not accepted." 10. In appeal before the CIT (A) the assessee once again urged that the claim for deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 80HHC is admissible to the appellant. The provisions of s. 80AB will not be applicable so far as s. 80HHC is concerned, as s. 80HHC gives deduction from the total income of the appellant and that there is no requirement that there should have been income from the export earnings by the appellant before deduction under s. 80HHC is allowed. I am therefore of the opinion that the ITO was not justified in disallowing the claim of the appellant. He is, therefore, directed to allow the claim of the appellant in respect of Rs. 49,600 on export turnover, for the asst. yr. 1983-84". 11. The ld. representative for the Department strongly argued that the CIT (A) was not justified in accepting the assessee's claim for deduction of Rs. 49,600 unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot difficult to comprehend if we keep in mind the various sub-heads contained in that Chapter. Once the gross total income of the assessee is a positive figure as in this case of Rs. 55,500, the assessee cannot be denied deduction claimed under s. 80HHC of the Act, merely on the ground that its income from business is a negative figure. There are also various other aspects which are in favour of the assessee in claiming deduction under s. 80HHC of the Act. However, we would like to rest our decision on the ground that the gross total income of the assessee is a positive figure and therefore, the assessee would be entitled to claim deduction under s. 80HHC of the Act. In this view of the matter, we would uphold the order of the CIT(A) on thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal in the case Atul Products Ltd. (ITA No. 989/Ahd/84)as well as the decision of the Hon'ble Bombay High Court in the case of Bombay Burmah Trading Corporation Ltd. vs. CIT (1983) 32 CTR (Bom) 306 : (1984) 145 ITR 793 (Bom) the ld. counsel for the assessee submitted that since the expenditure incurred is for printing stationery, postage, etc., the IT authorities ought to have accepted the assessee's claim for deduction of the same. The ld. representative for the department, on the other hand strongly relied on the order of the CIT(A) and urged that we should uphold the same. 18. On due consideration of the rival submissions of the parties as well as after perusing the aforesaid order of the Tribunal as well as the decision of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the IT authorities were not justified in disallowing the assessee's claim for deduction of Rs. 1,000. In this connection, he emphasised the fact in the modern days business world, such expenses are required to be incurred with a view to keep good relations with the local bodies, authorities, etc. He also highlighted the fact that Citizen Council is promoting Family Planning, better living conditions, etc., which could also be extended to the staff of the assessee company by virtue of the Managing Director becoming a member of such council. He also submitted that looking to the smallness of the amount involved, the IT authorities ought to have accepted the assessee's claim for deduction of the said amount without any demur, instead of becom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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