Revenue appeal dismissed, assessee allowed deduction under Section 80HHC for assessment years. The High Court dismissed the appeal filed by the revenue challenging the Tribunal's decision on the deduction claimed under Section 80HHC by the assessee ...
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Revenue appeal dismissed, assessee allowed deduction under Section 80HHC for assessment years.
The High Court dismissed the appeal filed by the revenue challenging the Tribunal's decision on the deduction claimed under Section 80HHC by the assessee for assessment years 1992-93, 93-94 & 94-95. The High Court held that the Tribunal's decision aligning with the Supreme Court's judgment in Hero Exports was correct, and no substantial question of law arose for consideration. Therefore, the appeal was dismissed, affirming the allowance of deduction under Section 80HHC for the assessee.
Issues: Appeal under Section 260A of Income Tax Act, 1961 against Tribunal's order regarding deduction under Section 80HHC for assessment years 1992-93, 93-94 & 94-95.
Analysis: The appeal was filed by the revenue challenging the Tribunal's decision on the deduction claimed under Section 80HHC by the assessee. The primary question of law proposed was whether the Tribunal was correct in upholding the deletion of an addition of Rs. 3,66,343/- on account of deduction u/s 80HHC by allowing the deduction of 10% of export incentive along with direct and indirect expenses while calculating business profits u/s 80HHC (3) (b).
The Assessing Officer had rejected the assessee's calculation, specifically disallowing the apportionment of 10% of expenses against export incentive. However, both the CIT (A) and the Tribunal ruled in favor of the assessee, upholding the claim for deduction under Section 80HHC.
Upon further appeal to the High Court, it was initially held that costs not related to export turnover could not be deducted from income from export incentives. Nevertheless, the Hon'ble Supreme Court, referring to its judgment in Hero Exports vs. Commissioner of Income Tax 295 ITR 454 (SC), overturned the High Court's decision and remanded the matter for fresh consideration.
After hearing arguments from both sides, the High Court noted that the Tribunal's decision aligned with the Supreme Court's judgment in Hero Exports, thereby concluding that no substantial question of law arose for consideration. Consequently, the appeal was dismissed by the High Court.
The judgment was delivered by Hon'ble Mr. Justice Adarsh Kumar Goel and Hon'ble Mr. Justice Gurdev Singh on November 10, 2009.
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