TMI Blog2013 (11) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... export of trading goods which had become final as this aspect had not been disputed by the Revenue before the Tribunal - The Assessing Officer is not empowered to disturb the indirect cost computed in the original assessment – Decided in favour of assessee. Additional Ground - Deduction u/s 80HHE - such claim had neither been made in the return of income nor at the time of original assessment or in appeal against the original assessment - Such claim cannot be made in fresh proceedings – Decided against assessee. Computation of indirect expenses for export business – Held that:- Tribunal had restored the matter to the Assessing Officer for the limited purpose of considering deduction under section 80HHC - The Assessing Officer was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in I. T. A. No. 1783/M/ 2004 observed that the ground raised by the Revenue related to deduction under section 80HHC in respect of DEPB income as there were losses from export business. The Tribunal held that in view of the retrospective amendments made to section 80HHC allowing deduction in respect of incentives even in case of losses, the claim of the assessee required fresh examination in the light of the amended provisions. In the fresh assessment proceedings, the assessee submitted that it had trading export of Rs. 60,25,320 out of total turnover of Rs. 71,11,585, and the assessee had also received DEPB income of Rs. 7,55,153. It was pointed out that in view of amended provisions, the assessee was entitled to adjust the DEPB income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the additional ground and observed that no such claim had been made by assessee in the return and, therefore, there were no good reasons for entertaining such claim. As regards the merit of the claim, the Commissioner of Income-tax (Appeals) observed that the Assessing Officer had rightly computed indirect cost by applying the ratio of export turnover to total turnover and since there was net loss, deduction under section 80HHC had been rightly disallowed by the Assessing Officer. Aggrieved by the decision of the Commissioner of Income-tax (Appeals) the assessee is in appeal before the Tribunal in which the decision of the authorities below to recompute indirect cost has been challenged. The assessee has also challenged the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Assistant Commissioner was not empowered to go into other questions. The same view had been followed by the Tribunal in the case of Asst. CIT v. Sri Ranganatha Traders [2005] 94 ITD 227 (Hyd). Several other judgments were also cited in support of the plea. It was accordingly urged that the Assessing Officer may be directed to accept indirect cost computed as per original assessment. The learned authorised representative also argued that additional ground raised before Commissioner of Income-tax (Appeals) regarding deduction under section 80HHE was legal ground which was required to be admitted by the Commissioner of Income-tax (Appeals) and, therefore, order of Commissioner of Income-tax (Appeals) not entertaining the additional ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Commissioner of Income-tax (Appeals) and the other before the Tribunal. The assessee was in the business of trading including export of trading goods. The assessee had also exported software products. Total turnover of the assessee was Rs. 71,11,585 which included trading export of Rs. 60,25,320. The assessee in the return of income had claimed deduction under section 80HHC. Since assessee was in trading of goods, the profit from export of trading goods under section 80HHC(3) is required to be computed by reducing the direct and indirect costs relating to trading goods from the export turnover. The Assessing Officer computed the profit from export of trading goods by the above method, which came to a loss. The Assessing Officer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disturb the indirect cost computed in the original assessment. This position is settled by other judgments some of which have been referred by the learned authorised representative as mentioned earlier. We are, therefore, unable to sustain the order of the Commissioner of Income-tax (Appeals) confirming the action of the Assessing Officer reworking the indirect cost. The order of the Commissioner of Income-tax (Appeals) is, therefore, set aside on this point and claim of the assessee is allowed. As we have allowed the claim of the assessee on merit, it is not necessary for us to go into the additional grounds raised before the Tribunal regarding exclusion of direct expenses relating to other activities while computing indirect cost of trad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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