TaxTMI 
TaxTMI 
2015 (1) TMI 613
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....ted 13.03.2007, passed by the Tribunal in ITA No.214/Ahd/2007, whereby the appeal filed by the revenue was dismissed by the Tribunal. 3. The facts of Tax Appeal No.58 of 2007 are that the assessee had filed its return for the Assessment Year 2001-02 on 30.10.2001, declared total income of Rs. 11,91,370/-. The Assessing Officer passed his order under Section 143(32) of the Income Tax Act on 16.02.2004 and determined the total income at Rs. 59,56,850/-. Against the said order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals). The CIT(A), vide order dated 13.10.2004 partly allowed the appeal of the assessee. Being aggrieved and dissatisfied with the order of the CIT(A), the assessee again filed an appeal before the....
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....in law and on facts in confirming the order of the CIT(A) cancelling order imposing the penalty of Rs. 5,50,465/- under Section 271(1)(c) of the I.T. Act, 1961 ?" 7. Learned advocates appearing for both the parties have submitted that the issue involved in these appeals is already concluded by the Apex Court in favour of the assessee and against the revenue in the case of Hero Exports v. Commissioner of Income-Tax, reported in [2007] 295 ITR 454. 8. We have heard learned advocates appearing for both the parties and perused the material on record. We have also perused the decision in the case of Hero Exports (supra). In paragraph Nos. 11 to 14 of the said decision, the Apex Court held as under:- &....
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....the total indirect expenses for earning both the incomes. Department reduces the FOB value by Rs. 50,000 whereas assessee contends that it should be reduced by Rs. 34,000 (Rs.50,000 # Rs. 16,000).Assessee claims apportionment at the rate of 10% of Other Income of Rs. 1,60,000 (in the above example). This is opposed by the Department saying that since apportionment does not apply to section 80HHC(3)(b), there is no question of applying the yardstick of 10%. According to the Department, the words "indirect costs" does not take into account the expenses to earn Other Incomes. In this case, reliance is placed on clause (e). However, the Department has failed to notice the words "attributable to exports" in section 80HHC(3)(b). &nbs....
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.... of 1991. Take a reverse case, if allocation of expenses is to be done on Actual Basis, it would not only be very difficult but in some cases actual apportionment may not be in the interest even of the Department. 14. In conclusion, we may state that under section 80HHC(3)(b) one has to balance the "principle of attribution" with the concept of "allocation". The concept of allocation is meant to reduce the incentive. However, when "allocation" has to be balanced with the "principle of attribution", the object is to reduce the incentive and not to eliminate it." 9. Since the issue raised in Tax Appeal No.58 of 2007 is already concluded by this Court, no elaborate reasons ar....