2005 (4) TMI 31

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....under section 80HHC of the Income-tax Act, subject to various conditions being duly complied with?" The assessment year involved is 1986-87. The brief facts of the case are as follows: The opposite party/assessee (hereinafter referred to as "the assessee") was a registered partnership firm and claimed deduction under section 80HHC of the Act in the year under consideration. The assessing authority has rejected the claim of deduction under section 80HHC of the Act on the ground that the required reserve had not been credited in the balance-sheet filed along with the return of income. The assessee contended before the Assessing Officer that the reserve had been duly created in the books of account, but due to inadvertence the correct....

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....mjee P. Ltd. v. Deputy CIT reported in [2004] 271 ITR 564. At the relevant time, section 80HHC of the Act read as follows: "(1) Where an assessee, being an Indian company or a person (other than a company) resident in India, is engaged in the business of export out of India of any goods or merchandise to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction equal to the aggregate of- (a) four per cent, of the net foreign exchange realisation; and (b) fifty per cent, of so much of the profits derived by the assessee from the export of such goods or merchandise as exceeds the amount referred to in clause (a): ....

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....ond proviso to section 80HHC of the Act came up for consideration before the apex court in the case of Karimjee P. Ltd. v. Deputy CIT [2004] 271 ITR 564 the apex court even allowed to comply with the requirement of the said proviso at its stage. The relevant part of the apex court decision is as follows: "The only reason for declining the relief to the assessee was the failure of compliance of the second proviso to section 80HHC of the Income-tax Act, 1961. In respect of other requirements, there is no dispute that the assessee has complied with the same. While the matter was being argued, we permitted learned counsel for the assessee to comply with the requirements of the said proviso and it is now represented that an amount equal to....