Appellant's Appeal Partially Allowed: Recalculation of Deduction under Section 80HHC

The Tribunal allowed the appellant's appeal partially, directing the AO to recalculate the deduction under section 80HHC by considering the sale of scrap at Rs. 4,37,204 instead of Rs. 2,37,204, resulting in a favorable outcome for the appellant regarding the computation of the deduction under section 80HHC.

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Issues:
1. Addition of Rs. 2,00,000 confirmed by CIT(A)
2. Deduction under s. 80HHC on the amount allegedly agreed upon
3. Agreement against the provisions of law
4. Computation of deduction under s. 80HHC based on scrap sold outside the books of accounts

Analysis:

1. The appellant appealed against the order of the CIT(A) confirming the addition of Rs. 2,00,000. Initially, the appellant raised effective grounds challenging the CIT(A)'s decision. However, during the appellate proceedings, the Authorized Representative for the appellant decided not to press ground Nos. 1 and 3, which were subsequently rejected as not pressed. The Departmental Representative for the Revenue did not oppose this decision. As a result, ground Nos. 1 and 3 were dismissed.

2. The main issue addressed in the appeal was the computation of deduction under section 80HHC concerning the addition of Rs. 2 lakhs due to scrap sales outside the books of accounts. The Authorized Representative for the appellant argued that this additional amount should be considered in the total turnover for calculating the deduction under section 80HHC. The representative highlighted that the figure of sale of scrap was initially taken at Rs. 2,37,204 but should now be adjusted to Rs. 4,37,204 due to the agreed addition of Rs. 2 lakhs. It was contended that the AO should recompute the deduction under section 80HHC based on this revised figure. The Departmental Representative for the Revenue did not object to this submission.

3. Consequently, the Tribunal directed the AO to recalculate the deduction claimed by the appellant under section 80HHC by considering the sale of scrap at Rs. 4,37,204 instead of the earlier figure of Rs. 2,37,204. The Tribunal allowed ground No. 2 of the appellant's appeal, resulting in a partial allowance of the appeal. The decision was made in favor of the appellant regarding the computation of the deduction under section 80HHC based on the revised figure of scrap sales.

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