2016 (8) TMI 1459 - AT - Income Tax

Tribunal overturns order disallowing export profit deduction, citing legal precedents.

The Tribunal allowed the appeal, setting aside the order of the Commissioner of Income-Tax (Appeals) disallowing the deduction under section 80HHC on ... Condonation of delay - Disallowance of deduction u/s.80HHC - export profit including DEPB incentive, excise duty refund and duty drawback - HELD THAT:- Nothing contrary was brought to our knowledge on behalf of Revenue. Facts being similar Pahilajrai Jaikishin v/s. JCIT Mumbai [2013 (8) TMI 1049 - ITAT MUMBAI], following same reasoning, we are of the view that there is a reasonable cause for delay in filing the appeal, so in the interest of natural justice we condone the delay in filing the appeal and admit the appeal for adjudication. Nothing contrary was brought to our knowledge on behalf of Revenue. Facts being similar, so, following same reasoning, we therefore set aside the order of the CIT(A) and direct the Assessing Officer to recomputed the deduction u/s.80HHC in respect of DEPB income in the light of the judgment of Hon’ble Supreme Court in the case of Topman Exports Ltd [2012 (2) TMI 100 - SUPREME COURT] Issues: Disallowance of deduction u/s.80 HHC on export profit including DEPB incentive, excise duty refund, and duty drawback.Analysis:1. The appeal was filed against the order of the Commissioner of Income-Tax (Appeals) confirming the disallowance of deduction u/s.80HHC amounting to Rs. 38,18,344 on export profit. The issue revolved around the interpretation of the provisions related to the deduction.2. The Authorized Representative argued that the issue was covered by a previous order of the ITAT 'C' Bench Mumbai in a similar case. It was highlighted that the appeal was delayed, but similar delays had been condoned in the past by the ITAT in the interest of justice.3. The Tribunal found a reasonable cause for the delay in filing the appeal and, in the interest of natural justice, condoned the delay and admitted the appeal for adjudication. No contradictory facts were presented by the Revenue, leading to the acceptance of the appeal for further review.4. Moving to the merits of the case, the Tribunal referred to a similar case where the issue was related to the allowability of the claim of deduction concerning DEPB income. Citing relevant precedents and judgments, the Tribunal directed the Assessing Officer to recompute the deduction u/s.80HHC in light of the judgment of the Hon'ble Supreme Court in a specific case.5. Consistent with the previous decision in a similar matter, the Tribunal set aside the order of the CIT(A) and instructed the Assessing Officer to recompute the deduction u/s.80HHC concerning DEPB income based on the judgment of the Hon'ble Supreme Court. The appeal filed by the assessee was allowed for statistical purposes, aligning with the legal interpretations provided.This detailed analysis of the judgment showcases the legal intricacies involved in the disallowance of deduction u/s.80 HHC on export profit, emphasizing the importance of legal precedents and interpretations in tax-related matters.