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of <h1>Tribunal Upheld CIT(A)'s Directions on Deduction Compliance</h1> <h3>Income-tax Officer Versus M/s. Dhanani Cycle Valve</h3> Income-tax Officer Versus M/s. Dhanani Cycle Valve - TMI Issues:- Compliance with ITAT directions for computation of deduction u/s 80HHC(3) of the Income-tax Act.Analysis:The appeal before the Appellate Tribunal ITAT RAJKOT concerned the compliance with the ITAT's directions for the Assessment Year 1994-95. The Assessing Officer had given effect to the ITAT's order but repeated the same computation of income, including the deduction u/s 80HHC(3), ignoring the ITAT's direction regarding the claim of allowance of 10% Duty Draw Back out of indirect expenses. The ld. CIT(A) directed the Assessing Officer to comply with the ITAT's directions and pass a consequential order addressing the issue raised by the Tribunal. The Revenue appealed, arguing that the AO had complied with the ITAT's directions and considered relevant judicial pronouncements. However, the ld. CIT(A) found that the AO had not examined the claim properly and had not complied with the ITAT's directions. The Tribunal upheld the ld. CIT(A)'s directions, emphasizing the need for a speaking order to give proper effect to the ITAT's order.The ld. Departmental Representative contended that there was no need for further directions to the Assessing Officer as compliance with the ITAT's directions had been achieved. However, upon reviewing the order of the ld. CIT(A), the Tribunal found that the AO had not adequately considered the appellant's claim regarding Duty Draw Back as direct overhead expenses. The Tribunal noted that the AO had not addressed the issue in line with the ITAT's directions and relevant judicial decisions. Therefore, the Tribunal agreed with the ld. CIT(A)'s directions, emphasizing the importance of a speaking order to address the issue properly and allow for proportionate expenditure deduction. The Tribunal dismissed the Revenue's appeal, affirming the fairness and reasonableness of the ld. CIT(A)'s directions.In conclusion, the Tribunal upheld the ld. CIT(A)'s directions for compliance with the ITAT's directions regarding the computation of deduction u/s 80HHC(3) of the Income-tax Act. The Tribunal emphasized the necessity of a speaking order to address the issue raised by the ITAT and ensure proper effect to the ITAT's order. The Tribunal declined to interfere with the ld. CIT(A)'s directions, ultimately dismissing the Revenue's appeal.
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