TaxTMI 
TaxTMI 
2005 (1) TMI 48
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....ng Officer to allow deduction under section 80HHC of the Income-tax Act, 1961, to the assessee when the mandatory condition of filing of audit report along with the return of income, for the purpose of deduction under section 80HHC was not satisfied, and when the jurisdictional High Court decision in the case of CIT v. Jaideep Industries [1989] 180 ITR 81 was available which was contrary to the view taken?" The assessee is an exporter. During the year 1997-98, it received incentives and duty draw-backs amounting to Rs. 3,24,083 on exports. In the return filed for the assessment year 1998-99, the assessee claimed exemption to the extent of Rs. 2,08,802 in lieu of incentives and duty draw-backs received in the previous financial year and s....
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....ding the taxability of cash incentives, the assessee was justified in claiming such receipts as exempt. As a result of such claim, the assessee's income was reduced to nil which disentitled it to claim deduction under section 80HHC and hence for bona fide reasons the audit report was not filed. This fact is also evident from the note appearing in the computation of income. No sooner the income turned into a positive figure on the ground of inclusive of cash incentives, the assessee filed the mandatory audit report and claimed deduction under section 80HHC. In the case reported in CIT v. Shivanand Electronics [1994] 209 ITR 63 (Bom), it has been held that if audit report is filed before the completion of assessment, it would not be fatal to ....
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....me-tax Act, 1961, the fulfilment of which entitles the assessee to claim deduction on the basis of Investment Deposit Account are mandatory, because the substratum of the claim of deduction is the deposit of the amount in the account maintained by the assessee with the Development Bank or utilisation thereof for purchase of new ship, new aircraft or new machinery or plant, and, therefore, unless the conditions embodied in sub-section (1) are satisfied the assessee cannot claim deduction. However, this is not true of sub-section (5) which only provides for filing the report of audit prepared by the accountant as defined in the Explanation below section 288(2) along with the return. The assessee's claim for deduction under section 32AB(1)(a) ....