2016 (3) TMI 580

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....ion plant and refinery. The assessee filed its return of income for assessment year 2002-03 on 28.10.2002 declaring income of Rs. 42,30,741/- after setting off brought forward business loss and depreciation. The assessee company has shown income u/s 115JB of Rs. 1,07,47,664/-. The return was processed u/s 143(1) on 21.03.2003. The case was re-opened u/s 147 by issuing notice u/s 148 and re-assessment u/s 147/143(3) was completed vide order dated 20.03.2006 determined taxable income of Rs. 50,86,889/-, after disallowing the claim of deduction u/s 80HHC to the extent of Rs. 8,56,148/- and deemed income u/s 115JB was taken at Rs. 1,16,03,812/-. The AO noticed that the assessee had claimed deduction u/s 80HHC of Rs. 30,27,846/-. However, it was....

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....t Order, 90% of which according to the Assessing Officer were to be reduced from the eligible profits for the purpose of section 80HHC. Such view of the Assessing Officer has been upheld by the higher authorities. The fact that these items of receipts were earned by the assessee and were included as business income and most of which were also taxed as business income is not in dispute. The only dispute is whether such items were to be included/eligible for the benefit of section 80HHC or not. According to the assessee, all such items arose purely out of business transactions of the assessee. The export incentives received clearly fall under section 28 of the Income Tax Act and are treated as business income. However, a differential treatmen....

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....s, of Hon'ble Madras High Court in the case of CIT vs. Caplin Point Laboratories Limited, 2007) 293 ITR 524 (Mad) and Mumbai Bench in the case of Strides Arcolab Limited vs. ACIT, (2011) 40 SOT 398 (Mumbai E Bench), ACIT vs. Perfect Forgings, (2011) 143 TTJ 117, I.T.A.T., Chandigarh "B" Bench, and CIT vs. Zoom Communication (P) Limited, (2010) 327 ITR 0510 (Del) . The ld. Authorized Representative finally concluded that in view of legal position available on this issue, no penalty can be levied on the assessee and penalty having been levied in a mechanical and routine manner is requested to be cancelled. 5. The Ld. DR relied upon the orders of the authorities below. 6. We have heard the rival contentions of both the parties. Looking t....