Tribunal grants deductions for export films under section 80HHC, upholds some expense disallowances. Remanded for correct deduction amount.

The tribunal partially allowed the appeals, granting deductions under section 80HHC for exporting advertisement films. The tribunal upheld certain disallowances of expenses due to lack of evidence or contestation by the appellant. The matter was remanded to the Assessing Officer to determine the correct deduction amount for the advertisement films.

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Issues:
1. Deduction under section 80HHC for export of Ad Films.
2. Addition of Rs. 2 lakhs out of Repairing Expenses.
3. Disallowance of deduction under section 80HHC for assessment years 1994-95 and 1995-96.
4. Part disallowances out of Conveyance Expenses, Repair Expenses, Car Expenses, and Expenses for Tea, Breakfast, Lunch etc.

Analysis:

Issue 1: Deduction under section 80HHC for export of Ad Films
The appellant claimed deduction under section 80HHC for exporting advertisement films, which was rejected by the Assessing Officer and CIT(A). The CIT(A) held that the appellant was providing job work services, not selling goods. The appellant argued that films produced and sent abroad qualify as goods, citing relevant case law. The tribunal disagreed with the CIT(A) and held that the appellant had indeed sold the advertisement films, entitling them to deduction under section 80HHC. The matter was remanded to the Assessing Officer to determine the correct deduction amount.

Issue 2: Addition of Rs. 2 lakhs out of Repairing Expenses
The appellant did not press this ground, and the tribunal rejected the appeal as not pressed. The tribunal noted that the appellant had capitalized a portion of the expenses without evidence to support the revenue nature of the remaining amount, upholding the CIT(A)'s decision.

Issue 3: Disallowance of deduction under section 80HHC for assessment years 1994-95 and 1995-96
Similar to the first issue, the tribunal decided in favor of the appellant for these assessment years as well, directing the Assessing Officer to allow deduction under section 80HHC for export of advertisement films after verifying the correct deduction amount.

Issue 4: Part disallowances out of Conveyance Expenses, Repair Expenses, Car Expenses, and Expenses for Tea, Breakfast, Lunch etc.
The appellant did not contest this ground, leading the tribunal to reject the appeal as not pressed. The tribunal upheld the CIT(A)'s decision, as the appellant failed to provide specific instances to challenge the disallowances, which were confirmed for similar reasons in previous assessments.

In conclusion, the tribunal partly allowed the appeals for statistical purposes, granting deductions under section 80HHC for exporting advertisement films and upholding certain disallowances due to lack of evidence or contestation by the appellant.

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