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TMI Blog2005 (2) TMI 447X X X X Extracts X X X X X X X X Extracts X X X X ..... rent view on the issue involved. Under the circumstances, the decision of Hon'ble Supreme Court in the case of Malabar Industries Co. Ltd. [ 2000 (2) TMI 10 - SUPREME COURT] , comes to the help of the assessee. Thus, we hold that on the given facts and circumstances of the case, the learned CIT was not justified in invoking the jurisdiction u/s 263. Accordingly, the order of the learned CIT is quashed. In the result, the appeal filed by the assessee is allowed. - HON'BLE M.K. CHATURVEDI, VICE PRESIDENT AND R.P. RAJESH, A.M. For the Appellant : Sunil M. Lala, Adv. For the Respondent : Dalbir Singh, Adv. ORDER R.P. Rajesh, A.M. 1. This appeal is by the assessee against the order of CIT, passed under s. 263 in respect of asst. yr. 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 8,90,130 which was arrived at after claiming deduction under s. 80HHC of Rs. 14,99,76,320. The assessment was completed by the AO on 27th March, 2003, computing total income at Rs. 8,90,130. Subsequently, the learned CIT-XII, Mumbai perused the assessment record and came to the conclusion that the order passed by the AO was prejudicial to the interest of Revenue on the ground that the AO allowed excess deduction under s. 80HHC. Accordingly, the learned CIT issued notice asking the assessee as to why the order of the AO should not be revised under s. 263 of the IT. Act, 1961. The assessee filed reply to the said notice. In the course of proceedings, the learned CIT also noticed that proviso to s. 80HHC(3) has been applied by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, and after considering the facts and circumstances of the case, the total income of the assessee is computed as under... Therefore, the learned counsel submitted that the AO has allowed the deduction after due consideration of various details called for, discussed and examined. Therefore, the learned CIT has wrongly come to the conclusion that the AO had wrongly allowed deduction under s. 80HHC (a) in respect of DEPB licence because as per learned CIT the said licence was not covered by the provisions of s. 28(iiia), (iiib) and (iiic); (b) in respect of export incentives earned by the appellant in respect of exports made through export house (by treating the export house turnover as part of export turnover in the proviso to sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sident, Federation of Indian Export Organization, PHD House (3 Floor), Hauz Khas, New Delhi in which it was stated as under: 2. In this regard, I am directed to inform you that the matter has been examined at length in the CBDT, in consultation with the Ministry of Law. It has been concluded that s. 80HHC provides for deduction from the total income in respect of profits derived from the export of 'goods or merchandise', which are realized in convertible foreign exchange and not in respect of incidental income arising through a Government scheme. Further, the elaborate scheme of computation of the deduction provided under s. 80HHC(3) of the IT Act does not cover profit on sale of DEPB credits. Such profits are, therefore, not eligib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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