9911796707
TMI Blog1998 (1) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... ivate limited company, is engaged in cutting and polishing of rough diamonds. The assessee-company claimed deductions under ss. 80HHA and 80-I without deducting the amount allowable under s. 32AB. The AO made prima facie adjustment under s. 143(1)(a) by allowing deduction under ss. 80HHA and 80-I from profits of the industrial undertaking after deducting the amount allowable under s. 32AB. The assessee filed an application for rectification under s. 154 of the Act praying for deduction under ss. 80HHA and 80-I without deducting the amount allowable under s. 32AB. The assessee submitted that deductions under ss. 80HHA and 80-I are allowable on profits and gains from industrial undertaking and not on net income computed under the head busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the course of proceedings under s. 154 and also before the CIT(A) in the appeal against the order under s. 154. The learned CIT(A) accordingly dismissed assessee's appeal following his earlier order dt. 27th Dec., 1991, pertaining to appeal against order of AO passed under s. 154. 5. Rasesh Shah, the learned counsel for the assessee, submitted that deductions under ss. 80HHA, 80HHC and 80-I are allowable on income from particular source and even applying s. 80AB, it does not appear to be legislative intent that the deduction is to be brought down to net income under a particular head of income. In support of his contention he placed reliance on the decision of Orissa High Court in the case of CIT vs. Tarun Udyog (1991) 99 CTR (Ori) 181 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnataka High Court in the case of CIT vs. HMT Ltd. (1992) 108 CTR (Kar) 215 : (1993) 199 ITR 235 (Kar). There is also a direct decision of the Ahmedabad Bench of the Tribunal in the case of Asstt. CIT vs. Madhu Silk Textiles in appeal No. 1782/Ahd/1992 where it was held that the deductions under ss. 80HHA and 80-I are allowable before allowing deduction under s. 32AB and the decision of the Cochin Bench of the Tribunal in the case of Harisons Malayalam vs. Dy. CIT (1995) 53 TTJ (Coch) 207 and case of Expo Machinery Ltd. vs. IAC (1989) 31 ITD 41 (Del). We accordingly direct the AO to allow deduction under ss. 80HHA and 80-I before allowing deduction under s. 32AB. The appeal filed by the assessee is accordingly allowed. 8. Now we take up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y signed and dated. During the course of assessment proceedings, the assessee submitted that as the assessee had filed the return of income in time under s. 139(1) the return of income could be validly revised under s. 139(5). It was further submitted that as per new procedure of assessment the revised return of income could be filed even after receipt of intimation under s. 143(1)(a). In the meanwhile, the assessee's appeal before the CIT(A) against the order under s. 154 was also heard. The learned CIT(A) vide his order dt. 27th Dec., 1991, allowed the assessee's appeal by observing that the AO had not doubted the veracity of genuineness of copy of Chartered Accountant's report filed along with the return of income and that s. 80HHC(4) do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the said order, the Tribunal also observed that if the report was defective in any way, being not signed, the AO would have got the defect removed as per provisions of sub-s. (9) of s. 139 but the AO could not disallow the claim made under the shelter of the said defect in the audit report. 13. Brahmbhatt, the learned Departmental Representative, strongly supported the order of the AO. He submitted that with the original return of income the assessee had appended the auditors report which was neither signed nor dated. According to him this was not at all a report in the eye of law, and accordingly the AO was justified in rejecting the claim of the assessee. He placed strong reliance on the judgment of Punjab Haryana High Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t means the intimation cannot be regarded as order of assessment except for the purpose of s. 264. Even if no cognizance is given to the revised return, there are so many decisions of High Courts and Tribunals to the effect that audit report can be filed in the course of assessment proceedings as the filing of audit report along with the return of income is not mandatory. In support, the following decisions of High Courts are quoted: (1) CIT vs. Malayalam Plantations Ltd. 1976 CTR (Ker) 81 : (1976) 103 ITR 835 (Ker); (2) Purshottamal Kishorilal vs. CIT 1978 CTR (Pat) 204 : (1978) 115 ITR 377 (Pat); (3) CIT vs. Shri Baldevji Maharaj Trust (1983) 36 CTR (All) 79 : (1983) 142 ITR 584 (All); (4) CIT vs. Western Rolling Mills (P) Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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