2006 (1) TMI 114

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....e order of the Income-tax Appellate Tribunal in I.T.A. Nos. 191(Mds.)/2000 dated March 7, 2005. The Revenue is the appellant. The assessee is a textile processor and exporter of hosiery fabric. The assessee filed a return of income on November 29, 1996, and after completing assessment on March 9, 1999, the Assessing Officer excluded the dyeing charges in terms of Explanation (baa) to section 80HH....

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....see, there is no merit in the appeal and accordingly, dismissed the same. Hence, the present appeal by the Revenue raising the following substantial questions of law: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that only 90 per cent. of the profit element in the dyeing charges received by the assessee could be reduced from t....

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....but for that operation the export cannot be made-is an income earned by using the entire undertaking of the company, i.e., machinery and power and other, manufacturing and administrative set up and therefore, the freezing and processing charges would definitely form part of one of the components of business profits, as the activity of freezing and processing would have a direct and immediate nexus....