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2021 (10) TMI 749 - BOMBAY HIGH COURTDeduction claimed u/s 80HHC - AO held that the assessee had no positive income from the export if 90% of incentives and other income are reduced from profit of the business and disallowed the deduction claimed - AO disallowed a sum and brought to tax the said amount under Section 69A (Unexplained money, etc.) after giving a finding that respondent has not been able to satisfactorily explain the acquisition/purchase of goods of this value - HELD THAT:- Question no.1 is no more res-integra in view of the judgment of the Apex Court in the case of ACG Associates Capsules (P.) Ltd. V/s. Commissioner of Income Tax, Central- IV, Mumbai [2012 (2) TMI 101 - SUPREME COURT] Whether on the facts and circumstances of the case, when the export income is Nil then whether the assessee is entitled to claim deduction u/s. 80HHC on export incentive? - Calculation by CIT (A) was not correct, still pursuant to this amendment coming into force with retrospective effect, respondent will be entitled to deduction under Section 80HHC even where profits derived from the export of goods was a negative figure, i.e., even where there was a loss. Addition u/s. 69A which is stand alone addition having no connection with the allowance or other wise of deduction u/s. 80HHC - It is not denied anywhere that any purchases were ever made or the entries for cash payments made were bogus entries. The only basis we find, when we read the entire order, for the Assessing Officer to come to the conclusion that he has arrived at that the explanation was unsatisfactory is because in his belief, based on a presumption, in cash purchases full consideration has to be paid before taking delivery. He has also stated that some of the suppliers had stated that they have not supplied to respondent but can that be a substantial question of law whether such supplies were made or otherwise? In our opinion, these are questions of fact. We also have to note that there is a finding that the Assessing Officer has accepted as genuine the payment made to the same suspect parties before the date of purchase. ITAT has not erred in confirming the order of the Ld. CIT (A) wherein it was held that the assessee is liable for disallowance u/s. 40A(3) of the IT Act instead of addition u/s. 69A made by the AO - No substantial question of law.
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