2012 (1) TMI 6

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....nd during the course of the regular assessment proceedings a questionnaire dated 6th August, 2002 was written to the assessee. Question Nos.4 and 5 of the said questionnaire read as under:- "4. The deduction claimed u/s 80HHC is excessive as FDR interest of Rs.10,47,538/- has been taken as business income and not as income from other sources. In effect, 10 per cent of this interest income amounting to Rs.1,04,754/-, has escaped taxation. Please show cause why this excess deduction u/s 80 HHC should not be added back to your income. 5. Rs.61,70,349/- has been claimed as deduction u/s 80IA. Please furnish documentary proof in support of this claim." 3. The aforesaid questionnaire was replied to by two letters both dated 4th December,....

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....of section 28 or of any receipts by way of a brokerage, commission, interest, rent, charges or any other receipt of similar nature included in such profit, and (b) The profits of any branch, office, warehouse or any other establishment of the assessee situate outside India. It is very clear from the plain reading of this section that even 10% of the interest, rent and other receipts would be eligible for deduction u/s 80HHC. 5. After considering the reply furnished by the assessee, assessment order dated 31st March, 2003 was passed accepting the returned income as declared. The said assessment order records that a chartered accountant/authorized representative attended from time to time and had filed detailed information as called for. T....

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....e reasons cited above, the assessee has wrongly claimed a higher deduction u/s 80HHC then what he is allowed as per law. The deduction u/s 80HHC actually works out to Rs. 1,76,48,818/- as against wrong claim of deduction by the assessee at Rs. 2,35,68,838/-. Thus excess deduction claimed by the assessee u/s 80HHC comes to Rs. 59,20,020/-. However, since the assessee has claimed a lesser deduction u/s 80IA of Rs. 61,70,349/- instead of Rs. 74,34,797/-, the excess deduction claimed by the assessee u/s 80HHC at Rs. 59,20,020/- will be reduced by the amount of short deduction u/s 80IA of Rs. 12,64,448/-. Thus excess deduction u/s 80HHC claimed by the assessee would be Rs. 46,55,572/- (59,20,020/- - 12,64,448 ). Thus, the assessee has claimed ex....