TMI Blog1997 (9) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee computed the benefit under s. 80HHC of the IT Act in a sum of Rs. 53,46,57,779. The return filed by the assessee was processed under s. 143(1)(a) of the IT Act by the AO. While processing the same the AO however, made some adjustments regarding the computation of the benefit under s. 80HHC of the IT Act. According to the AO, the premium in REP licences should not be included in the total and export turnover. As per s. 80HHC(4A) (baa) 90 per cent of the sums referred to in cls. (iiia), (iiib) and (iiic) of s. 28 of the IT Act should be excluded. Therefore, the AO recomputed the deductions under s. 80HHC and in the process reduced the deduction claimed by the assessee by a sum of Rs. 7,64,07,140. Objecting to the said recomputation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrangement with the export house. (iii) The third ground is that claim under s. 80HHC has been made in accordance with the export legal opinion and in accordance with the certificate issued by the Accountant qualified under s. 288. This certificate issued by the Accountant as per sub-s. (4) of s. 80HHC is not in the nature of a report as for example under s. 44AB and the certified amount is, therefore, to be taken as the amount of the certificate, it would also show that any departure could not be a matter of prima facie adjustment since such departure from the certificate would make the matter, ipso facto, debatable. Lastly, it was argued that the Bombay High Court in the case of Tanna Exports Anr. vs. M.G. Kamath Anr. (1992) 108 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the case of Tanna Exports Anr. vs. M.G. Kamat Anr. (1992) 108 CTR (Bom) 213 : (1992) 202 ITR 219 (Bom), where it was held that while processing the return under s. 143(1)(a) of the IT Act, the AO is precluded from recomputing the deduction under s. 80HHC. The learned counsel for the assessee also relied upon certain other decisions rendered by other High Courts as well as the decisions rendered by this Tribunal with reference to the processing of the return under s. 143(1)(a). The learned counsel for the assessee also relied upon the Circular, dt. 24th Aug., 1994 in support of his contention that the AO has precluded from making the prima facie adjustments while processing the return under s. 143(1)(a). The learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l are rendered with reference to the direct exporters and the said decision would not apply to the present case. Hence, it was contended that there is no error in the order of the CIT(A) warranting interference. 6. We have considered the rival submissions and considered the material on record. The dispute relates to the prima facie adjustments with reference to the deduction claimed under s. 80HHC. Admittedly, the assessee is a supporting manufacturer who was exporting its manufactured good through a trading or a export house. According to the assessee, the transactions between the assessee and the trading house, namely MMTC are governed by the terms of the agreement between them. Therefore, in respect of the exports effected by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1)(a), it was held that the AO has no power to recalculate the deduction under s. 80HHC while processing the return under s. 143(1)(a) of the IT Act. The Hon ble Bombay High Court relied upon its own order in the case of Khatau Jankar Ltd. Anr. vs. K.S. Pathania, Dy. CIT Anr. (1992) 102 CTR (Bom) 194 : (1992) 196 ITR 55 (Bom) and allowed the writ petition quashing the prima facie adjustments effected by the AO. Further, the clarification issued with reference to the prima facie adjustments by the Board itself shows that with reference to the relief under s. 80HHC, the relief can be denied only if the audit report specified under that section is not filed along with the return of income, but not otherwise. This also clearly shows that w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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