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2010 (11) TMI 576 - ITAT, MUMBAIDisallowed - Deduction u/s 080IA - Deductions exceeded 100% of the profits of the undertaking - Assessee claimed deduction u/s 80 HHC as well as 80 I/80IA of the Act - Assessee has been claiming deduction under section 80 I since the assessment year 1991-92 and the assessment year 2000-01 was the last of the 10 years for which the deduction under section 80I is claimed -- Held that:- Section 80 IA was inserted by the Finance Act 1991 w.e.f. 1/4/1991. The provisions of sub-section (9A) referred to above were inserted by the Finance Act, 1998 w.e.f. 1/4/1999. Section 80IA(1) specifically mentions that the deduction under section 80IA shall be allowed "in accordance with and subject to the provisions of section 80 IA" - Upto assessment year 1998-99 there was no condition regarding allowing deduction both under section 80IA as well as 80 HHC of the Act. From A.Y 1999-2000 however, this provision came into effect - Hence, pointed out in the order of the CIT(A) for A.Y 1998-99, the deductions exceeded 100% of the profits of the undertaking. We are of the view that in the light of the law as it existed in A.Y 2000-01 the restrictions imposed by the provisions of sub-section (9A) cannot be over looked - Decided against of assessee. whether the service charges amounting to Rs.20,17,524 are to be excluded from the "profits of the Business" for computing deduction u/s.80-HHC of the Act - As per the Hon'ble Supreme Court in the case of CIT vs. K. Ravindranathan Nair (2007 -TMI - 2378 - Supreme Court of India) ,held that any income which is independent of exports business, even if it falls under the head "Profits and gains of business or profession" will not per se become eligible for deduction under section 80HHC - the claim of the assessee cannot be decided without finding out the nature of the service charges, which has not been spelt out either in the order of the AO or the CIT(A). In this circumstances we set aside the order of CIT(A) and remand the issue to the AO for fresh consideration in the light of the principles laid down by the Apex Court. Method of accounting - vlauation of stock - section 145 - addition to closing stock on account of excise duty - Held that:- The Assessing Officer has given a finding that the assessee follows exclusive method of valuation. It is clear from the financial statements that the assessee was following inclusive method of valuation of inventory as contemplated by section 145A of the of the Act. Consequently the addition made by the Assessing Officer is without any basis.
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