2005 (4) TMI 590

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.....1995. Pursuant to the directions issued by the court, the Tribunal has stated the case and has referred the following question of law for our consideration and opinion and the same is as under: "Whether on the facts and in the circumstances of the case, the ITAT is right in law in holding that the assessee is entitled to get 100% deduction under sec. 80-HHC respect of the export business?" 2. In order to answer the question of law raised for our consideration and opinon, the facts in brief requires to be noticed. They are as under: The assessee is a registered partnership firm carrying on business of manufacture and sale of gold jewellery. the assessee during previous year relevant to the assessment years had carried o....

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....f second appeals before the tribunal in ITa.Nos.2085 & 2086/Bang/1992. The Tribunal after hearing the parties to the lis and following the decision of the tribunal in the case of V.D. Swamy & Co.Ltd.Vs. DCIT-44 ITD 91, has concluded that the assessee is entitled to 100% deduction under Sec. 80-HHC of the Act in respect of export business. 5. The revenue by filing applications before the Tribunal under Section 256(1) of the Act, had made a request to the Tribunal to state the case and refer the question of law, which according to them would arise out of the orders passed by the Tribunal in ITA, Nos. 2085 & 2086/Bang/1992, for consideration and opinion of this Court, The Tribunal had rejected the request so made by the revenue. Therefore, ....

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.... 254 ITR 646, sought to justify the orders passed by the Tribunal. 8. The question that requires to be considered and decided by us is, whether the Tribunal was justified in allowing the assessee's appeals by holding that the assessee is entitled to 100% deduction under Sec.80-HHC of the Act in respect of its export business in gold jewellery? 9. The facts are not in dispute in the present case. The assessee is carrying on the business of manufacture and sale of gold jewellery. It has both export sales and domestic sales. It is also true that it maintains separate books of accounts for its export sales and domestic sales. 10. The circular issued by the Board in No. 564 dated 5.7.1990 - 184 ITR 137, states how the deduction under Se....

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....rpose of sub-section (1) of Section 80-HHC of the Act, if an assessee carries on business of exclusive of exports, it is clause (a) of sub-section (3) of sec.80-HHC of the Act would apply and if the business carried on by the assessee consists of exports of goods for merchandise and domestic business in the same goods, it is clause (b) of sub-section (3) of Sec.80-HHC of the Act would apply therefore, where the business carried on the the assessee consists of both export as well as local sales then the deduction could be allowed only in respect of of profits in proportion of the export turnover to the total turnover. That is what that was done by the assessing authority. However, the Tribunal, on the basis that the assessee has maintained s....