TaxTMI 
TaxTMI 
2012 (3) TMI 120
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.... directing the Assessing Officer to verify is without any justification and liable to be quashed. 3. The Ld. CIT failed to appreciate that exchange gain on forward contract transaction of Rs.80,72,500/- was never forming part of export turnover and hence, directing the Assessing Officer to verify and reduce the same from export turnover is unjustified, and liable to be quashed. 3 Ground nos 1 & 2 regarding deduction u/s 80HHC on interest receipt. 3.1 The assessment in this case was completed u/s 143(3) vide order dated 29.12.2006. Subsequently, the CIT proposed to revise the assessment order by issuing show cause notice dated 29.3.2007, inter-alia on the issue of deduction u/s 80HHC on interest receipt as under: "It is seen that the total interest received during the year as per TDS certificate enclosed with the return of income is Rs. 53,81,082/-. However, as per the details submitted and the figure of interest considered for purpose of working of the eligible deduction u/.s 80HHC is only Rs. 47,86,487/-. Besides, it is seen from the TDS certificates that the interest received are on FDs and Securities. Accordingly, the same should have been taxed as income from....
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....urt in the case of CIT vs Damodar Mangallji Mining Co reported in 326 ITR 437. 5 We have considered the rival contention as well as the relevant material on record. It is settled proposition of law that if the Assessing Officer has taken one of the possible views, then CIT cannot take a different view. The issue regarding the deduction u/s 80HHC on interest received on the deposits was already considered and decided by the Tribunal in assessee's own case for the AY 2000-01, 2001-02 and 2002-03. The Assessing Officer reduced 90% of the interest income by applying Clause (baa) of Explanation to Sec.80HHC and therefore, the view taken by the Assessing Officer is a possible view on the issue. By invoking sec. 263 what is required to be seen is whether the view taken by the Assessing Officer is after application of mind and a possible view and not something which cannot be disputed. Thus, when the view of the Assessing Officer is not impossible view as the issue, in the year under consideration, was pending in the appeal filed by the assessee before the CIT(A) as well as before the Tribunal and vide order dated 10.3.2008, the Tribunal has decided the issue in favour of the assessee a....
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....g impression that the exchange gain on forward contract translation is part of the export turnover and accordingly, directed to exclude the same from the export turnover. He has submitted that the exchange gain on forward contract was not included in the export turnover of the assessee; therefore, there is no question of reducing the same. He has referred the details of computation of deduction u/s 80HHC at pages 22 & 23 of the paper book and submitted that the assessee has not included the exchange gain on forward contract in the export turnover. Therefore, the same cannot be excluded from the export turnover as directed by the CIT in the revision order. 8.1 He has also filed a reconciliation sheet and explained the figure of export turnover. He has thus submitted that when the CIT has proceeded on a wrong fact by assuming that the exchange gain is part of export turnover, then the revision order is not justified and sustainable. The Assessing Officer has mentioned in the giving effect proceedings that the assessee has already explained all the facts before the Assessing Officer; but the Assessing Officer has passed the giving effect order by following the directions of the CIT....
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.... is not realised at the end of the financial year. Since these contracts are against export receivables, the gain on the same has direct nexus to sales and the same are required to be included in the export turnover. In view of this, the gains on forward contract are not covered under explanation (baa) to sec 80HHC. Thus, for calculating deductions u/ s80HHC the gain on forward contact cannot be excluded from the turnover." 9.4 From the reply of the assessee, it is clear that the assessee took a stand that the exchange gain on forward contract has direct nexus to the sales and the same required to be included in the export turnover; therefore, this amount is not covered as per clause (baa) of Explanation to sec. 80HHC. 9.5 Now, the assessee before us has taken a stand that this amount was never part of the export turnover; therefore, it cannot be reduced from the export turnover. It is to be noted that in the details of export turnover, as furnished by the assessee, at page 22 of the paper book, the assessee has not included the amount of exchange gain either in the export turnover or in the total turnover but included the said amount in the profit from business and according....