Tribunal decision: Revenue appeal partially allowed, Assessee cross-objections dismissed. Penalty deleted, deduction remanded.

The Tribunal partially allowed the Revenue's appeal for statistical purposes, dismissed the Revenue's appeals, and dismissed the Assessee's cross-objections as not pressed. The judgment was pronounced on 07/08/2009. The Tribunal upheld the CIT(A)'s decision to delete the penalty imposed under section 271(1)(c) due to the deletion of additions made on account of unexplained cash credit under section 68. The issue regarding the computation of deduction under section 80HHC was remanded back to the Assessing officer for reconsideration in light of the relevant amendment.

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Issues involved:
The judgment involves issues related to additions made by the Assessing officer on account of cash credit u/s.68 of the Income-tax Act, 1961, treatment of exports to Russia as bogus, computation of deduction u/s.80HHC, and deletion of penalty levied u/s.271(1)(c) of the Act.

Additions on Account of Cash Credit u/s.68:
The Assessing officer alleged that the assessee was involved in bogus exporting of goods to Russia based on information from the Directorate of Revenue Intelligence. The assessee argued that the addition of the same amount u/s.68 would result in double taxation as the income had already been offered for taxation. The Tribunal upheld the CIT(A)'s order, stating that the addition would amount to double taxation and dismissed the Revenue's appeals on this issue.

Computation of Deduction u/s.80HHC:
The issue revolved around whether the loss at the first limb of Section 80HHC should be ignored and taken as "Nil" for computation of deduction u/s.80HHC. The Fifth proviso to sub-Section(3) of Section 80HHC introduced by the Finance Act, 2005 was highlighted. Both parties agreed that the matter should be reconsidered by the Assessing officer in view of the amendment. The Tribunal set aside this issue for re-examination by the Assessing officer.

Deletion of Penalty u/s.271(1)(c):
The penalty levied by the Assessing officer u/s.271(1)(c) was deleted by the CIT(A) in light of the Tribunal's decision confirming the deletion of additions made on account of unexplained cash credit u/s.68. The Tribunal upheld the deletion of the penalty, stating that the Assessing officer had accepted the turnover for working out deduction u/s.80HHC. The appeals of the Revenue on this issue were dismissed.

Conclusion:
The Tribunal allowed the Revenue's appeal in ITA No.1684/Ahd/2004 partly for statistical purposes, dismissed the Revenue's appeals in ITA No.790-795/Ahd/2005, and dismissed the Assessee's COs No.151-153/Ahd/2005 as not pressed. The judgment was pronounced in Open Court on 07/08/2009.

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