TMI Blog2007 (9) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... tical for the two years, we may refer to assessment year 2000-01 for details. The issue in dispute relates to the claim of the assessee for deduction under section 80HHC of the Act. In this regard, the pertinent facts are that the assessee filed a return of income for the assessment year 2000-01 wherein a deduction under section 80HHC was claimed at Rs. 19,13,58,168. The return of the assessee was subjected to an assess- ment under section 143(3) of the Act and the Assessing Officer vide his order dated 28-2-2003 duly accepted the claim of the assessee for deduction under section 80HHC of the Act. The Commissioner has in the impugned order directed that the premium received by the assessee-company on sale of quota rights be treated as "other receipts" as defined in the Explanation ( baa ) to section 80HHC of the Act. In the view of the Commissioner, the entire receipts on account of sale of quota receipts could not constitute a part of the profits and gains of business or profession for the purposes of computing "profits of business" under Explanation ( baa ) to section 80HHC. According to the Commissioner, such an action of the Assessing Officer done while finalizing the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laced in the Paper Book at page 22 to show that there is no allegation much less an effort on the part of the Commissioner to show as to how the order of assessment passed by the Assessing Officer was erroneous. Submitting further the learned counsel argued that on a perusal of the show-cause notice and the impugned order passed by the Commissioner, it is evident that there is no allegation that the order of assessment has been framed on an incorrect assumption of facts or incorrect application of law or without application of mind. The learned counsel, in the above background, submitted that there is no material brought on record by the Commissioner to reach an inference that the deduction under section 80HHC of the Act was not admissible to the assessee in the manner determined by the Assessing Officer in respect of the profits from sale of quota rights. It was, therefore, submitted that the show-cause notice issued by the Commissioner was vague and it depicted an arbitrary approach in assuming jurisdiction under section 263 of the Act. Coming to the impugned order, the learned counsel pointed out that in para 9, the Commissioner has observed that the assessment was completed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible for the benefits of section 80HHC even by the Central Board of Direct Taxes in its Instructions bearing No. 133/137/97-TCL, dated 23-2-1998, a copy of which has been placed in the Paper Book at page 47. It was contended that in para 4 of the said Instruction, the premium on sale of export quotas has been held to be entitled to receive the same treatment as profits on sale of import licences, cash assistance and duty drawback. Considered in this light, the learned counsel submitted that the assessee would be eligible to claim the benefit of section 80HHC on such income by virtue of the proviso to section 80HHC(3) thereby resulting in a quantum of deduction under section 80HHC even higher than what has been claimed and allowed in the assessment proceedings. In this regard, reliance was placed on the decision of the Mumbai Bench of the Tribunal in the case of Anil L. Shah v. Asstt. CIT [2005] 95 TTJ (Mum.) 216. It was, therefore, submitted that the assumption of jurisdiction by the Commissioner under section 263 of the Act and his subsequent decision to set aside the order of assessment and directing the Assessing Officer to make the assessment afresh was a fruitless exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present controversy. 6. In the instant case, we may first examine as to the manner in which the assessee has claimed deduction under section 80HHC of the Act. Evidently, the assessee claimed deduction under section 80HHC of Rs. 19,13,58,168 in the return of income which was also accompanied by the report of an accountant in terms of section 80HHC(4) of the Act. A copy of the requisite report was also being placed in the Paper Book filed before the Tribunal. It is observed that the receipt by way of sale of quota rights have been shown as a part of total turnover. Secondly, the said gross receipts were taken as part of local turnover and consequently it constituted a part of the "profits of the business". It was on this basis the assessee has thereafter computed its claim under section 80HHC at Rs. 19,13,15,168 which has since been accepted by the Assessing Officer in the course of assessment under section 143(3) of the Act. The first and the foremost aspect that we find expedient to examine is as to whether the claim so made by the assessee and also allowed by the Assessing Officer in the assessment finalised under section 143(3) could be said to be prejudicial to the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this manner is re-worked and held to be admissible to the assessee as per law, there does not remain any prejudice to the revenue because of the manner in which the Assessing Officer has finalised the assessment under section 143(3) of the Act for the reason that the deduction claimed and allowed by the Assessing Officer stands on a lower footing. Indeed the Commissioner was correct to say that the Assessing Officer was wrong in not excluding 90 per cent of the income from sale of quota rights from the profits of business" in terms of Explanation ( baa ) to section 80HHC but he failed to notice further that such amount is required to be again subjected to relief under section 80HHC in terms of the proviso to section 80HHC(3) as mandated by the CBDT Circular dated 23-2-1998 ( supra ). It is, therefore, abundantly clear that the income resulting to the assessee from the sale of quota rights is exigible for the benefits envisaged under section 80HHC and such position has been upheld by the Tribunal in the case of Anil L. Shah ( supra ) and also in line with the Instruction issued by the CBDT ( supra ). Thus, in principle, the assessee is entitled to seek relief under section 80 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
