High Court affirms Tribunal's decision on deduction claim under Income-tax Act

The High Court upheld the Tribunal's decision to allow the assessee's deduction claim under section 80HHC of the Income-tax Act, 1961 for profits from exports and sales to foreign buyers. The Revenue's attempt to refer a question of law was rejected as the Tribunal's decision was deemed lawful, citing relevant case law and a stay order by the Rajasthan High Court. The High Court found no legal issue warranting a reference, affirming the Tribunal's decision in favor of the assessee.

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The judgment delivered by M. P. Singh, ACTG. C. J., pertains to an application under section 256(2) of the Income-tax Act, 1961. The assessee, a registered firm, claimed a deduction of Rs. 1,02,955 under section 80HHC for profits earned from exports and sales to foreign buyers. The Assessing Officer allowed the deduction, but the Commissioner of Income-tax modified the order under section 263, withdrawing the deduction. The Income-tax Appellate Tribunal allowed the assessee's appeal against this modification. The Revenue's application under section 256(1) to refer a question of law was rejected by the Tribunal, which based its decision on the Supreme Court case Ben Gorm Nilgiri Plantations Co. v. STO [1964] 15 STC 753 and the stay order on clause (aa) of section 80HHC(4A) by the Rajasthan High Court. The High Court found no illegality in the Tribunal's decision and rejected the reference, stating no question of law was involved.

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