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TMI Blog2010 (3) TMI 844X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the case, the learned Commissioner of Income-tax (Appeals)-XI, Ahmedabad ought to have upheld the order of the Assessing Officer. 4. It is, therefore, prayed that the order of the learned Commissioner of Income-tax (Appeals) may be set aside to the above extent and that of the Assessing Officer be restored." 3. The learned Commissioner of Income-tax (Appeals) has decided this issue as under : "3. The facts of the case are that the appellant-company, during the year under consideration, was engaged in the business of export of trading. The return of income declaring income of Rs. nil was filed by the appellant-company on October 22, 1997. The total income of the appellant was determined at Rs. 2,61,89,260 vide order under section 143(3) dated March 23, 1999. Thereafter, consequent upon the Commissioner of Income-tax (Appeals)'s order the income of the appellant was computed at Rs. nil. Subsequently, the assessment was reopened under section 147 by issuing notice under section 148 of the Income-tax Act dated November 21, 2001. The assessment under section 143(3) read with section 147, which is presently in appeal, was finalised on November 28, 2002 determining the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer has wrongly computed the deduction under section 80HHC at Rs. 1,34,51,904 as against Rs. 1,83,46,195 computed by the appellant and added alleged excess deduction under section 80HHC of Rs. 48,94,291. It was submitted by the authorised representative that the appellant had made export of Rs. 6,01,49,288 as against the remittance received within the time was only Rs. 3,18,68,248. According to the authorised representative this amount of remittance received by the appellant was within the time treated as export turnover as defined under the Act. It was further submitted by the authorised representative that the Assessing Officer has not considered the factual position that the amount of direct cost, i.e., cost of goods purchased to be considered only the cost related to the goods which was eligible for the export turnover as defined under the Act. However, the appellant has taken into account of total direct cost of goods which were exported irrespective of the fact that the appellant has not received the remittance in full and this amount was not treated as export turnover. In support of the appellant's claim the authorised representative has filed before me the statement of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the authorised representative and the observations of the Assessing Officer in the assessment order. I have also perused the case records of the appellant. There is no dispute on the issue that out of the total exports of Rs. 6,01,49,288 the appellant is entitled for deduction under section 80HHC only on Rs. 3,18,68,248 as the amount brought to India in foreign exchange within the time limit was Rs. 3,18,68,248. Section 80HHC(2)(a) clearly provides that the section 80HHC applies to all goods or merchandise, other than those specified in clause (b), if the sale proceeds of such goods or merchandise exported out of India are received in or brought into India by the assessee (other than the supporting manufacturer) in convertible foreign exchange, within a period of six months from the end of the previous year or within such further period as the competent authority may allow on this behalf. Since foreign exchange realised is limited to Rs. 3,18,68,248 the appellant is entitled for deduction on that amount only. The total cost of goods exported is Rs. 1,77,16,803 (including purchases made during the year of Rs. 80,83,698) against the total exports of Rs. 6,01,49,288. In the comput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quent action of restricting the deduction under section 80HHC to Rs. 1,34,51,904 is uncalled for and not in accordance with the provisions of law. The Assessing Officer is directed to allow the deduction under section 80HHC at Rs. 1,81,50,397 as computed by him in the original assessment order and in the order giving effect to the Commissioner of Income-tax (Appeals)'s order." 4. The learned Departmental representative relied on the order of the learned Assessing Officer whereas the learned authorised representative for the assessee relied on the order of the learned Commissioner of Income-tax (Appeals). 5. We have heard the rival submissions and perused the orders of the lower authorities and the materials available on record. In the instant case, the assessee claimed deduction under section 80HHC at Rs. 1,81,50,397 which was allowed by the learned Assessing Officer at Rs. 1,34,51,904 on the ground that the assessee has shown excess export profit by showing lesser purchases. On appeal, the learned Commissioner of Income-tax (Appeals) deleted the above disallowance by observing as under : "3.2 I have considered the facts of the case and submissions of the authorised representati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r deduction under section 80HHC. Use of words 'such export' makes it very clear. From the perusal of case records, it is found that the then Assessing Officer, while passing original assessment order under section 143(3) dated March 23, 1999 had after considering the appellant's claim restricted the deduction under section 80HHC at Rs.1,81,50,397 (as against the appellant's claim of Rs.1,83,46,195) against which the appellant had filed appeal before the Commissioner of Income-tax (Appeals). In the order giving effect to the Commissioner of Income-tax (Appeals)'s order dated April 19, 1999 (Assessing Officer's order dated May 26, 2000) the Assessing Officer has allowed deduction under section 80HHC at Rs. 1,81,50,397. After having carefully considered the report of the auditors in Form No. 10CCAC, original assessment order under section 143(3) and subsequent orders of the Commissioner of Income-tax (Appeals) and order giving effect to the Commissioner of Income-tax (Appeals)'s order, I find that the deduction under section 80HHC was rightly allowed by the then Assessing Officer at Rs. 1,81,50,397 in the original assessment order and in the order giving effect to the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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