TaxTMI 
TaxTMI 
1985 (12) TMI 68
X X X X Extracts X X X X
X X X X Extracts X X X X
....The ld. CIT (A) erred in law and on facts of the case in holding that the expenditure on account of medical benefits, expenditure on house rent allowance and personal Accident Insurance premium of Managing Directors should not be considered for the disallowance under s. 40(C) of the Act." 4. At the time of hearing, the ld. counsel for the assessee pointed out that while deciding this issue in favour of the assessee, the CIT(A) has relied on the order of the Tribunal (Special Bench) as well as the decision of the Hon'ble Delhi High Court mentioned in his order. He therefore, urged that we should uphold the order of the CIT (A) on this point. Faced with this position, the ld. representative for the Department submitted that the Revenue has....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wing manner: "9. Claim for deduction under s. 80HHC (Rs. 49,600) The claim for deduction under s. 80HHC on account of export turnover is put forward at the time of hearing vide letter dt. 23rd Feb., 1984. The computation of the business income shows a loss and in fact the total income comprises of long term capital gain only. Sec. 80HHC falls under Chapter VI-C under the heading "Deductions in respect of certain incomes" and therefore it envisages deduction from income from export business. Sec. 80AB also provides for deduction under Chapter V-IC in respect of any income of the nature specified in that section which is included in gross total income of the assessee. In view of this, the claim for deduction under s. 80HHC is not accept....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is included in the total income of the appellant. Therefore, I am of the opinion that deduction under s. 80HHC is admissible to the appellant. The provisions of s. 80AB will not be applicable so far as s. 80HHC is concerned, as s. 80HHC gives deduction from the total income of the appellant and that there is no requirement that there should have been income from the export earnings by the appellant before deduction under s. 80HHC is allowed. I am therefore of the opinion that the ITO was not justified in disallowing the claim of the appellant. He is, therefore, directed to allow the claim of the appellant in respect of Rs. 49,600 on export turnover, for the asst. yr. 1983-84". 11. The ld. representative for the Department strongly argued....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ity in the order of the CIT(A) on this point. The provisions contained in Chapter VIA of the Act, are not difficult to comprehend if we keep in mind the various sub-heads contained in that Chapter. Once the gross total income of the assessee is a positive figure as in this case of Rs. 55,500, the assessee cannot be denied deduction claimed under s. 80HHC of the Act, merely on the ground that its income from business is a negative figure. There are also various other aspects which are in favour of the assessee in claiming deduction under s. 80HHC of the Act. However, we would like to rest our decision on the ground that the gross total income of the assessee is a positive figure and therefore, the assessee would be entitled to claim deductio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of bonus shares". (For the asst. yr. 1983-84, the amount involved is Rs. 539). 17. Relying on the order of the Tribunal in the case Atul Products Ltd. (ITA No. 989/Ahd/84)as well as the decision of the Hon'ble Bombay High Court in the case of Bombay Burmah Trading Corporation Ltd. vs. CIT (1983) 32 CTR (Bom) 306 : (1984) 145 ITR 793 (Bom) the ld. counsel for the assessee submitted that since the expenditure incurred is for printing stationery, postage, etc., the IT authorities ought to have accepted the assessee's claim for deduction of the same. The ld. representative for the department, on the other hand strongly relied on the order of the CIT(A) and urged that we should uphold the same. 18. On due consideration of the rival sub....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ity and has no connection with the assessee's business. 20. The ld. counsel for the assessee strongly argued that the IT authorities were not justified in disallowing the assessee's claim for deduction of Rs. 1,000. In this connection, he emphasised the fact in the modern days business world, such expenses are required to be incurred with a view to keep good relations with the local bodies, authorities, etc. He also highlighted the fact that Citizen Council is promoting Family Planning, better living conditions, etc., which could also be extended to the staff of the assessee company by virtue of the Managing Director becoming a member of such council. He also submitted that looking to the smallness of the amount involved, the IT authorit....