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2016 (4) TMI 308 - ITAT MUMBAI

2016 (4) TMI 308 - ITAT MUMBAI - TMI - Deduction/ claim under section 80 HHC - non netting of the loss of trading export with profit from manufacturing export - Held that:- We find that at the time of filing of return there was ambiguity about netting off of profits/loss of the Export trada/businesses, that during the course of hearing the assessee agreed that it had no objection if the matter was decided in the light of the judgment of IPCA Laboratories(2004 (3) TMI 9 - SUPREME Court ), then la .....

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is directed to decide the issue afresh after affording reasonable opportunity of hearing to the assessee - Decided in favour of assessee in part by way of remand. - ITA/6344/Mum/2013 - Dated:- 6-4-2016 - Shri Joginder Singh, Judicial Member And Rajendra, Accountant Member For the Petitioner : Shri M. Murli For the Respondent : Ms. Vasanti Patel ORDER Per Rajendra A. M. Challenging the order, dated 28/08/2013 of the CIT (A)-1, Mumbai the Assessee has filed the present appeal. During the course o .....

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14, 040/-. 2. The effective ground of appeal is about deduction/ claim under section 80 HHC of the Act. During the assessment proceedings, the AO found that assessee had incurred a loss of ₹ 9. 80 crores from trading export and had earned profit of ₹ 4. 35 crores from manufacturing export, that it had not netted of the loss of trading export with profit from manufacturing export, that it computed the deduction under section 80 HHC on the profit of ₹ 4. 35 crores, being profit f .....

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urther stated that the judgment was not available when the assessee had filed the return of income i. e. on 31/10/2002. After considering the submissions made by the assessee on various occasions, the AO referred to the case of Rohan Dye and Intermediates Ltd. of Hon'ble Bombay High Court, wherein it was held that if the assessee had incurred losses from export activity before incentive no deduction u/s. 80 HHC of the Act was allowable, that receipt on account of DEPB could not be considered .....

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FAA). It was stated before him that it had total turnover of ₹ 7. 84crores from exports, that it had claimed a total deduction of ₹ 6. 15 crores u/s. 80HHC that while filing the return it had claimed that loss from trading should be ignored based on the judgments prevailing at the time of return, during the assessment proceedings it was submitted that it was agreeable to the proposal that loss should not be so ignored following the judgment of IPCA Laboratories (supra), that the AO h .....

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to neutralize the incidence of duties of the input content of the export products, that same fell within the definition of direct cost and had to be reduced from the cost while computing profit from export of trading goods, that the AO had held that the receipts on account of DEPB could not be considered for purpose of determining deduction u/s. 80HHC. After considering the submission of the assessee and the writ petition filed by the assessee before the Hon'ble Bombay High Court(Writ Petiti .....

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the assessee amounted to segregation of income and loss in the different stages of export business though it is a single business of export carried on by the assessee, that it was not a case of supporting-manufacturer, that the deduction u/s. 80HHC was on the aggregate of export profit, separation of profits of units was not provided under the said section, that the assessee had made no submission in that regard, that the denial of deduction in the case under consideration was based on the decis .....

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dment Act, 2005)provisions with regard to the claim for deduction u/s. 80HHC had undergone a major change, that 90% of export incentives were to be allowed to be adjusted against the loss as per section 80HHC(3)5th Proviso, that while giving effect to the 4th provisio to section 80HHC(3), dealing with an assessee having more than turnover of ₹ 10 crores, had to be read down as held by the Hon'ble Supreme Court in the case of Avani Exports and Anr. (2015-TIOL-46-SC-IT, dt. 303. 2015), t .....

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