2011 (5) TMI 1032

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....learned CIT(A)'s order in confirming the addition of ₹ 27,63,505/- disallowed by the AO on account of training and development expenses. 4. An alternative ground has also been taken by the assessee vide ground Nos.5 & 6 that even if the aforesaid addition of ₹ 27,63,505/- is taken into account, the total profit of the assessee will still be eligible for deduction u/s 10B of the act and in that way, the total income of the assessee shall remain the same. 5. We shall first take up the alternative ground Nos.5 & 6 taken by the assessee. 6. With regard to ground Nos.5 & 6, the assessee has submitted a synopsis in writing as under:- "The issue in this appeal is disallowance of expenditure of ₹ 27,63,505/- incurred by the ass....

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....505/- to the returned income. Thus, without going into the issue whether expenditure incurred is legitimate or not the net assessable income will be same even after disallowance in view of increased exemption under Section 10B. Thus Ground nos.1 to 4 are academic in nature. Accordingly, Ground No.5 in case is decided in the manner stated above, there will be no need to give a finding on Grounds No.1 to 4 as there will be no revenue implication." 7. The learned DR, on the other hand, submitted that there is no finding by the AO that assessee's income is exempt u/s 10B of the Act and, therefore, the benefit of deduction of increased profit u/s 10B is not available to the assessee. 8. We have heard both the parties and have carefully gone t....

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....i Bench 'F' has held that deduction u/s 80HHC is to be computed on the basis of assessed profits or gains of business as finally assessed after taking into consideration the addition, if any. In this connection, the ITAT has relied upon the following decisions:- (i) Shriram Pistons & Rings Ltd. Vs. ACIT - (1995) 81 Taxman 164(Del)(Mag); and (ii) Mandhana Exports (P) Ltd. Vs. ACIT - (2002) 76 TTJ (Mumbai) 559. 10. We, therefore, restore this issue back to the file of the AO to ascertain as to whether the assessee's business income is eligible for deduction u/s 10B and if it is so found, the AO is directed to allow deduction u/s 10B in respect of the increased profit assessed by the AO. The AO shall provide reasonable opportunity of being ....