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DCIT, Cir. 1, Ahmedabad Versus Associated Dyestuff P. Ltd. and Vica-Versa

2016 (4) TMI 245 - ITAT AHMEDABAD

Deduction u/s.80HHC - Held that:- The issue is covered by the decision of the Hon’ble Supreme Court in the case of CIT Vs. Avani Export [2015 (4) TMI 193 - SUPREME COURT] as well as in the case of Topman export (2012 (2) TMI 100 - SUPREME COURT OF INDIA ). The ld.AO is directed to grant deduction under section 80HHC of the Act. - Decided in favour of assessee - ITA No.652/Ahd/2007, ITA No.776/Ahd/2007 - Dated:- 1-3-2016 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBE .....

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The appeal of the assessee i.e. ITA No.776/Ahd/2007 was allowed for statistical purpose by following the decision of the ITAT, Special Bench decision in the case of Topman Exports Vs. ITO, (2009) 318 ITR (AT) 87 (Mum.SB). Dissatisfied with this order of the Tribunal, the department approached the Hon ble Gujarat High Court and challenged the issue involved in the appeal of the assessee. The appeal with the Hon ble Gujarat High Court was registered as Tax Appeal No.775 of 2010. The Hon ble Gujar .....

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mitted to decide the matter in accord with the law laid down by this court in Topman Exports Vs. Commissioner of Income Tax. 3. The prayer made by the learned counsel for the parties is fair and reasonable. 4. Civil Appeal is disposed of by observing that the Tribunal shall consider the appeal appropriately in accordance with the above judgment. No costs. 5. In view of the above, High Court s order does not survive and it is set aside. 4. It has been brought to our notice that there are two corr .....

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Court pointing out that this issue has arisen from the ITA No.776/Ahd/2007 before the Tribunal. The issue involved in the appeal of the Revenue was never taken up before the Hon ble Gujarat High Court or before the Hon ble Supreme Court. The issue in the appeal of the Revenue was whether the CIT(A) has erred in deleting the addition of ₹ 30,678/- which was made by the AO on the ground that the assessee has made payment of employer s contribution towards PF after expiry of limitation. This .....

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e Tribunal in ITA No.2622/Ahd/2011. The Tribunal after taking cognizance of the Hon ble Supreme Court in the case of CIT Vs. Avani Exports as well as Topman Exports Vs. ITO (supra) has allowed the appeal of the assessee and granted relief claimed with regard to deduction under section 80HHC. 6. On due consideration of the facts and circumstances, we are of the view that since the Tribunal s vide order dated 30.10.2009 passed originally, was reversed by the Hon ble Gujarat High Court, therefore, .....

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e not to take up the ITA No.2622/Ahd/2011 for decision, but considering the subsequent decision of the Hon ble Supreme Court passed on 25-10-2013, we are of the view that whole exercise will be an academic one, because, the Hon ble Supreme Court has remitted the issue to the Tribunal with a direction to consider in the light of the decision in the case of Topman Exports Vs. ITO (supra). In other words, finding of ITAT recorded in the order dated 30.10.2009 which were set aside by the Hon ble Hig .....

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se) vide its order dated 30/10/2009 was pleased to restore the issue in respect of deduction u/s.80HHC of the Act, by observing as under:- 9. Respectfully following the above judgment of the Tribunal, we hold that profit element on DEPB licence will be covered by section 28(iiid) and, accordingly, by third proviso to section 80HHC(3) of the I.T.Act, 1961 as the turnover of the assessee exceeds ₹ 10 crores. This amount shall be excluded for the purpose of computing deduction u/s.80HHC of th .....

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er. 4.1. There is no dispute with regard to the fact that the decision of the Special Bench rendered in the case of Topman Exports vs. ITO(supra) has been upheld by the Hon ble Supreme Court. Therefore, the issue remains to be examined whether the AO has computed the deduction as per the decision of the Special Bench rendered in the case of Topman Exports(supra). The contention of the ld.counsel for the assessee is that the computation of profit of the business as per Explanation(baa) of Section .....

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deduction of ₹ 38,08,898/- u/s.80HHC as shown will remain unchanged. The AO did not accept the contention on the basis that the export turnover of the assessee is more than ₹ 10 crores. Further, it was noticed that profits derived from export in respect of goods or merchandise manufactured are at loss. Profits derived from export in respect of trading goods is at ₹ 12,13,054/-. Thus, the assessee-company has a net loss derived from export of goods or merchandise manufactured an .....

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