AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (8) TMI 530
X X X X Extracts X X X X
X X X X Extracts X X X X
....s. 80 HHC of the I.T.Act, 1961 at Rs. 92,81,627/. The learned C.I.T. was of the opinion that "the applicable provisions of subsection (3) of the section 80HHC stipulate that profit derived from export of goods or merchandise shall be as such, profit as computed under the head 'profits and gains of business/profession". Section 29 read with section 28 of the Incometax Act requires profits and gains of business and profession to be computed in accordance with the provisions contained in section 30 to 43 of the Act. Due cognizance has, therefore, to be given to section 32(2) and section 32 A (3) of the Act with reference to unabsorbed depreciation and investment allowance as relatable to the particular case. (b) The Assessing Officer is seen to have allowed the deduction under section 80HHC of the Act with reference to profits of business without considering the aforementioned position of law. The Assessing Officer should have allowed deduction under section 80HHC with reference to profits as determinable under section 29 of the Act. The Assessing Officer is thus seen to have allowed the deduction under section 80HHC without subjecting the claim to due verification and/subsequent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndia from foreign dividends and interest income was not part of the total income and thus not assessable in the hands of the assessee under the I.T. Act, 1961, and held that n this point also, the CIT cannot invoke jurisdiction under section 263. The Tribunal following the above mentioned decisions allowed the assessee's appeal and set aside the order of the CIT. (g) With regard to deduction under section 80HHC the business profit is to be computed in accordance with section 29 read with section 28 of the Act. Section 29 categorically mentions that computation of business income should be in accordance with the provisions contained in sections 30 to 43C of the Act. Therefore, the unabsorbed depreciation under section 32(2) and investment allowance under section 32A(3) of the Act relating to the amalgamated companies and also to assessee's company to be reduced in determining the profit for the purpose of allowance under section 80HHC in view of the clear provisions in the Act, i.e., section 263, deduction under section 80HHC was computed by the Assessing Officer at Rs. 28,06,948/as against deduction allowed earlier u/s. 80 HHC at Rs. 93,75,523/. Accordingly, according to t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssioner of Income Tax passed in exercise of his power under Section 263 of the Act in respect of the order passed by the Assessing Officer while computing deduction under Section 80 HHC of the Act. 5. Mr. Bhattad, learned counsel appearing for the Revenue submits that the Tribunal ought not to have set aside the order of Commissioner of Income Tax under Section 263 of the Act as it was unexceptional for the following reasons: (a) The Assessing Officer while allowing deduction under Section 80 HHC of the Act at Rs. 92.81 lakhs in the order dated 29.03.1993 passed under Section 143(3) of the Act did not consider, much less examine the claim of the respondentassessee. Thus the order was erroneous and prejudicial to the interest of the revenue warranting exercise of jurisdiction under Section 263 of the Act by the Commissioner of Income Tax; and (b) The Assessing Officer while allowing the claim of deduction of Rs. 92.81 lakhs under Section 80 HHC of the Act had completely ignored the fact that profits and gains of business has to be computed in accordance with the provisions contained in Section 30 to 43C of the Act. Consequently the Assessing Officer ought to have examined the cla....
X X X X Extracts X X X X
X X X X Extracts X X X X
....attention to the decision of this Court rendered on 10.07.2017 in ITR No. 39 of 1998 (CIT .vs. M/s Ballarpur Industries Ltd.) wherein we accepted the Respondent-assessee's contention that it is not open to the Revenue to bring in new facts in the absence of the same being recored in the statement of case set by the Tribunal. In our above order dated 10.07.2017 we placed reliance upon the decision of the Apex Court in CIT .vs. Calcutta Agency Ltd., 19 ITR 191. In the above case the Apex Court held that the High Court has to give its opinion on question referred to it in the context of the facts set out in the statement of case. In fact it observed as under: "The jurisdiction of the High Court in the matter of income tax references is an advisory jurisdiction and under the Act, the decision of the tribunal on facts is final....... It is, therefore, the duty of the High Court to start by looking at the facts found by the Tribunal and answer the questions of law on that footing. Any departure from this rule will convert the High Court into a fact finding authority, which it is not under the Advisory jurisdiction. The Statement of case under the Rules is prepared with the knowledge....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sional power under Section 263 of the Act is not called for. The two views he submits by inviting our attention to the fact that statement of case refers to the decision of the Tribunal placing reliance upon its decision in Mysore Exports Ltd. (supra) taking the same view. Further in support that there were two views possible at the time when the Assessing Officer passed the order, reliance was placed upon the decision of the Andhra Pradesh High Court in CIT .vs. Gogineni Tobacco Ltd238 ITR 970 which relies upon the orders passed under the Act indicating the issue is debatable. Without prejudice to the above, it is also submitted that from a bare reading of the statement of case it is clear that the Assessing Officer had allowed deduction under Section 80 HHC of the Act only after due application of mind. In support of the aforesaid, he relied upon the fact of the statement of case refers to the words "allowed deduction under Section 80 HHC of the Act". Further observation in the statement of case " Assessing Officer is thus seemed to have allowed deduction under Section 80 HHC without subjecting the claim to due verification and/ subsequent quantification and allowability". 13. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t make it a view of the Assessing Officer. A view has necessarily to be preceded by examination of the claim and opting to choose one of the possible results. In the absence of view being taken, merely because the issue itself is debatable, would not absolve the Assessing Officer of applying his mind to the claim made by the assessee and allowing the claim only on satisfaction after verification/enquiry on his part. A view in the absence of examination is no view but only a chance result. Therefore, even the decision of the Andhra Pradesh High Court in Gogineni Tobacco Ltd (supra) will also have no application. 15. It appears from the decision of the Apex Court in Max India Ltd. (supra) that the Assessing Officer had taken one of the two views of the word "profit" as occurring in Section 80 HHC of the Act. Therefore, it was in that context that the Apex Court held that Section 263 of the Act would not be attracted particularly when the view of the Assessing Officer was found to be a view taken by various authorities under the Act. In passing we may point out that as recorded in the statement of case, the Tribunal held the exercise of powers under Section 263 of the Act by the Comm....