TMI Blog2014 (11) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... 0% of the interest by netting of interest expenses having nexus with interest income – the order of the CIT(A) for reducing 90% of the interest by netting of interest expenses having nexus with interest income as held in ACG Associated Capsules (P) Ltd. v. CIT [2012 (2) TMI 101 - SUPREME COURT OF INDIA] - Decided against revenue. Deduction u/s 80HHC – Computation of export of trading goods - Held that:- CIT(A) rightly observed that apart from expenses of ₹ 1,10,79,522/-, auditor’s expenses of ₹ 17,27,437/- need to be allocated proportionately which makes total income of ₹ 1,28,06,959/- for allocation - thus, the AO was rightly directed to rework the indirect expenses for export of trading goods – Decided against revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HHC. The word is receipt and not income accordingly while computing deduction u/s. 80HHC 90% of gross receipt is to be reduced and not net of interest. In this regard, stand of assessee has been that interest was earned on over due collection of sales bills, margin money deposits with the Bank and turnover tax refund from State Government etc. and these have direct business connection and were necessitated by primary business needs and do not represent any investment of surplus funds. Thus, it was submitted before CIT(A) that interest income should be netted out with expenses and only interest income not having nexus with interest income should be disallowed. CIT(A) having considered the submission on behalf of assessee directed the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 86,34,619/- was attributable to export of trading goods. Therefore, this was to be reduced only for purpose of calculating export turnover of trading goods and not for the purpose of determining cost of export trading goods. Assessee had determined indirect cost at ₹ 5,55,527/- as per report in Form no.10CCAC. Assessing Officer determined the total direct expenses, which was to be allowed in the ratio of export turnover of trading goods to total turnover as ₹ 112.66 crores, which consisted of the following: 1. Payment to employees Rs.21.30 crores. 2. Administrative Misc. expenses Rs.23.76 crores. 3. Selling and distributive expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1,10,79,522/- which have been allocated proportionately as indirect cost for export of trading goods, telephone and FAX expenses of ₹ 60,60,926/-, printing and stationery expenses of ₹ 14,53,189/-, electricity charges of office of ₹ 27,99,095/-, business promotion expenses of ₹ 3,29,364/-, books and periodical expenses of ₹ 1,81,253/-, newspaper and magazine expenses of ₹ 1,35,695/- and rent of ₹ 1,20,000/-. Assessee submitted that at Delhi branch the export of trading goods i.e. yarn was carried out and only one person was engaged and the clearing and forwarding was done through an agent. The connected salary expenses allocated by the appellant was of ₹ 2 lakhs and rent, rates and tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in reopening the assessment and hence the order passed by the learned CIT(A) is contrary to law and facts of the case and that the order of the assessing officer was without jurisdiction under section 148/147 and hence be held void ab initio. 1.2. The learned CIT(A) erred in law and on fact in not upholding that there must be fresh material or fresh information available on record to form requisite belief of underassessment and not mere change of opinion on the part of Assessing Officer. 1.3. Therefore, it is submitted that no tax has been under-assessed during the original assessment and except audit remark there is no further cogent additional information evidencing any escapement of income. Hence, this reassessment is held witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order after detailed appraisal/examination of facts, merits and case laws allowed deduction u/s. 80HHC which has been withdrawn in re-assessment order without any new facts or material. Thus, re-opening is based on change of opinion and on re-appraisal of same evidence on record, hence no valid. Ld. Authorized Representative also objected the reopening on the basis of audit query. Without prejudice to the merit of issue raised for re-opening by way of Cross Objection as we have decided the issue in favour of assessee by upholding the order of CIT(A) on merit. According to us, the issue raised by way of Cross Objection on point of re-opening, goes academic and assessee is at liberty to raise the same as and when there is need for same. As a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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