TaxTMI 
TaxTMI 
2013 (6) TMI 100
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.... Court on the substantial questions of law Nos. 1, 2 and 5, which are reproduced as under:- "1. Whether on a true and correct interpretation of the provisions of Section 80 HHC, the Tribunal was legally correct in holding that the processing charges amounting to Rs.46,31,715/- as realized by the assessee were liable to be excluded from the computation of turnover as well as eligible profit so as to have the effect of reducing the assessee's claim under Section 80 HHC to NIL ? 2. Whether on a true and correct interpretation of the provision of Section 254, it was legally correct for the Tribunal to pass the impugned order which has the effect of reducing the relief under Section 80 HHC to "NIL", even though the Assessing Officer himself ha....
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....ed to Rs.16,89,778/- from Rs.86,466/-. However the first appellate authority vide order dated 14.02.2005 further allowed the claim under Section 80HHC by giving a relief for Rs.28,15,316/-. Being aggrieved, the revenue as well as the assessee have filed the appeals before the Tribunal. The Tribunal vide its impugned order has allowed the claim of the revenue by denying any relief to the appellant. Not being satisfied, the appellant-assessee has filed the present appeal. With this background, Sri K.R. Rastogi holding brief of Sri S.K. Garg, learned counsel for the appellant-assessee, with the help of written submission submits that the Tribunal has wrongly relied on the decision of the Karela High Court in the case of CIT vs. Smt. T.C. Ush....
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.... 288 ITR 151 (Mad.), where it was observed that the export profits are required to be computed in the ratio of export turnover to total turnover as contemplated in the formula. (ii) Commissioner of Income Tax vs. United India Shoe Corpn. (P) Ltd.; (2008) 302 ITR 326 (Mad), where it was observed that the income from job work earned by the assessee is by utilisation of the entire resources or business apparatus. The Tribunal had also found that the job work is linked to the manufacturing activity of the assessee. If that be so, we find no error or infirmity in the order of the Tribunal holding that 90 per cent of the job work charges should not have been excluded from business profits while computing deduction under Section 80 HHC of the Act....
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....Kumar, learned standing counsel for the Income-tax Department justified the impugned order passed by the Tribunal. He also submits the written submission. After hearing both the parties and on perusal of the record, it appears that the assessee was engaged in the manufacturing and sale of the plastic Woven Fabric Bags and Paper Reinforced Bags for the purpose of export as well as local market. In addition, the assessee was also engaged in the job work for its clients. Regarding the benefit under Section 80HHC, in computation, there is no difficulty in calculating the deduction, where the assessee is having the manufacturing activities and entire production is exported, there being no other business. In such a case, the total profit will b....
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....is manufacturing and exporting plastic woven fabric bags and paper reinforced bags. The processing charges received by the assessee is on account of conversion of granules to woven fabric/liners or bags and also printing of bags. This activity can not be treated as having any nexus with the export activity of the assessee. It is to be noted that the assessee has separately shown a sum of Rs.46,31,715 as processing charges and not included it as part of sales in the P/L account filed alongwith the return. By not treating the processing charges as part of the total turnover, the assessee has itself treated it as receipts in the nature of income from other sources. In fact, the assessee has interpreted the provisions of clause (baa) as per its....