2013 (11) TMI 575

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....alculating by the Auditor in their report in Form No. 10CCAC is correct and the same is admissible to the assessee, which is contrary to the provisions of Sec. 80HHC(3)(b) read with explanation (e) to this sub-section of I.T. Act. 2. On the facts and in the circumstances of the case, the ld. CIT(A has erred in directing to exclude the amount of Rs. 9,25,11,213/- on account of interest on deferred receivables from Iraq. 3. The appellant craves to be allowed to amend, delete or add any other ground of appeal during the course of hearing of this appeal." 3. Apropos issue of deduction u/s. 80HHC amounting to Rs. 2,51,07,351/- On this issue Ld. AO has made the disallowance while observing as under:- "The assessee company is engage....

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....ibutable to export of traded goods and assessee is not a liberty to claim only those expenses which he feels are indirectly related to export of trading goods. Procedure laid down by statute will over ride any accounting treatment followed by assessee. 6. A.R. Sh. Bhupinder Singh, Joint GM, Taxation was served with a show cause notice dated 8.7.2002 which was personally received by him. Assessee was required to show cause why the deduction u/s. 80HHC should not be computed as per express provisions of this Section. Till date no reply or representation has been received. It is clear that assessee has nothing to say in this matter and the issue is decided as per merits. 7. Accordingly the deduction u/s. 80HHC is re- computed as per prov....

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....as only the turnover relating to the export business of the assessee. It was held that the turnover of other businesses cannot be introduced to inflate the turnover artificially. Referring to the ratio of the above decision, Ld. CIT(A) held that it is clear that only in direct expenses of only the trading in export commodity i.e., rolling stock, have to be taken into account for the purposes of deduction u/s. 80HHC. 5.1 In this regard, Ld. CIT(A) further referred to the decision of the C.I.T. vs. Rathore Brothers 254 ITR 656. In this case, it was held that the provisions for disallowing portion of export earnings is not applicable where separate accounts for export business are maintained. Ld. CIT(A) observed that assessee is engaged in ....

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....e assessee, nor he could rebut reliance placed by the Ld. Counsel of the assessee on the case laws. 9. Hence, in the background of the aforesaid discussions and precedents, we do not find any infirmity in the order of the CIT(A). Accordingly, we affirm the same. 10. Apropos issue directing to exclude the amount of Rs. 9,25,11,213/- on account of interest on deferred receivables from Iraq. On this issue assessee has shown Rs. 9,25,11,213/- as deferred receivables interest. However, while computing income chargeable to tax, assessee had excluded this amount on the plea that the same has been accounted in the books to meet the legal requirement under the Statue. That there is no case of any accrual or receipt of income. Ld. AO disallo....