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2017 (8) TMI 1240 - HC - Income TaxLevy of penalty u/s 271(1)(c) - deduction under Section 80HHC disallowance - AO computed the deduction under Section 80HHC by excluding the sale of scrap from the total turnover and the proportionate profit from the profits of the business - Held that:- The issue has now been finally decided by the Hon’ble Supreme Court in Commissioner of Income Tax-VII, New Delhi Vs. Punjab Stainless Steel Industries [2014 (5) TMI 238 - SUPREME COURT] wherein held that the proceeds generated from the sale of scrap would not be included in the total turnover. It was observed that the intention behind the enactment of Section 80HHC of the Act was to encourage export so as to earn more foreign exchange. It was concluded that once the Government decides to give some benefit to someone who is helping the nation in bringing foreign exchange, the revenue should also make all possible efforts to encourage such traders or manufacturers by giving such business units more benefits as contemplated under the provisions of law. Thus the question regarding inclusion of sale of scrap in the total turnover is required to be examined afresh by the Assessing Officer in the factual matrix of the case. We set aside and the matter be remanded to the Assessing Officer for deciding the issue regarding penalty afresh after the decision in quantum proceedings in accordance with law.
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