TMI Blog2010 (1) TMI 916X X X X Extracts X X X X X X X X Extracts X X X X ..... - Held that:- matter remanded back to AO for working out the assessee's income for the year in light of the amended law, i.e., qua s. 80HHC, - ITA No. 520/Coch/2006; ITA No. 920/Coch/2007; - - - Dated:- 29-1-2010 - N. Vijayakumaran, Sanjay Arora, JJ. C.R. Rema and Venu C. Govind for the Assessee T.J. Vincent for the Revenue ORDER Sanjay Arora, Accountant Member:- 1TA No. 520/Coch/2006:- 1. This appeal by the Revenue is arising out of the order by the Commissioner of Income-tax (Appeals)-II, Kochi ['CIT(A)' for short], dt. 30th Jan., 2008 for the asst. yr. 2003-04. 2.1 The facts of the case are that the assessee filed its return of income for the relevant year at an income of Rs. 20,14,420 after claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sable under s. 28(iiid). He, however, agreed with the assessee's other claim, i.e., for the non-reduction of the export commission paid by the assessee for getting the export orders, as the definition of the 'export turnover' as provided in Expln. (b) to the section did not provide for any such adjustment or reduction. Though, however, in view of the denial of the deduction under s. 80HHC on the DEPB income, the same would only be academic, as the deduction under s. 80HHC would still work to nil, i.e., even by not excluding the export commission while working the figure of export turnover. Aggrieved, the assessee is in second appeal. 3. Before us, it stands contended on the assessee's behalf that the learned CIT(A) had gone wrong in rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er ss. 28(iiia) to 28(iiie) of the Act, so that the condition of a positive figure of such profit for the eligibility of the claim for deduction under s. 80HHC, as held by the Hon'ble apex Court in the case of IPCA Laboratory Ltd. (supra), would not apply, the law having been amended since with retrospective effect. 4.2 Secondly, the decision by the Special Bench of the Tribunal in the case of Topman Exports (supra) is on the point and clarifies the amounts assessable qua the DEPB credit. Only the profit arising on the transfer of the DEPB benefit/transfer (to a third party, following the prescribed procedure in its regard) would be assessable under s. 28(iiid), for determining which its cost would be its face value, which benefit would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vide its ground No. 4, the assessee is aggrieved by the dismissal of its ground 5 before the first appellate authority, even as the same states, incorrectly though, of it being not entertained by him. The issue relates to the deductibility of expenditure incurred on the issue of bonus shares. The same, even though debited to its PandL a/c, not 'claimed' by the assessee itself per its return of income, on the basis that the same was a capital expenditure. However it stood 'claimed' before the learned CIT(A) on the strength of the decision by the apex Court in the case of CIT vs. General Insurance Corporation (2006) 205 CTR (SC) 280 : (2006) 286 ITR 232 (SC), holding the same to be a revenue expenditure as no benefit or advantage of enduring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s constitutes the Revenue's case in disallowing the assessee's claim. 8.2 However, we do not consider it to be a fit case, being distinguishable on facts, for the application of the principle laid down in the case of Goetze India Ltd. (supra), endorsing its view expressed in the case of Addl. CIT vs. Gurjargravures (P) Ltd. 1978 CTR (SC) 1 : (1978) 111 ITR 1 (SC), clarifying that the assessee's claim having not been made before the AO per the return of income (ROI), i.e., the mode prescribed under the Act, there is no way he could consider the same, distinguishing its earlier decision in the case of NTPC Ltd. vs. CIT (1999) 157 CTR (SC) 249 : (1998) 229 ITR 383 (SC), wherein the power of the Tribunal to entertain a legal ground, where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered as having not been preferred thereby, so as to preclude its admissibility for consideration on merits. This would be in contradistinction to an omission to claim per the return of income. 8.3 However, the foregoing would not amount to the acceptability of the assessee's claim, as it would not, again, imply its having proved the impugned expenditure in terms of s. 37(1), which it is required to under the law; it being clear that the AO also did not examine the matter from that standpoint; the assessee's view being in consonance with his perception of the law as well. As such, the matter would be required to be restored back to his file for fresh adjudication in conformity with law. We decide accordingly. 9. In the result, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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