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2016 (4) TMI 570 - ITAT BANGALORE

2016 (4) TMI 570 - ITAT BANGALORE - TMI - MAT computation - Excess deduction u/s 80HHC without setting off losses incurred by the assessee on export of trading goods - revision u/s 263 - Held that:- Computing MAT liability under the provisions of sec.115JB, deduction u/s 80HHC shall be allowed after setting off losses suffered on export of trading goods. Therefore, there was no issue on the point of allowing deduction at 100% instead of 30% while computing MAT liability u/s 115JB. There is no qu .....

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the revision proceedings /s 263 were initiated only on the point of setting off of loss suffered in export of trading goods while computing deduction us 80HHC, then the claim of the assessee that while computing MAT liability of the assessee u/s 115JB deduction u/s 80HHC shall be allowed on the full amount instead of 30% of the profit derived from export of goods cannot be taken into consideration because the revision proceedings u/s 263 of the Act cannot be used for the benefit of the assessee .....

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ions of the Act and not u/s 263. We do not find any merit or substance in the appeal of the assessee. Consequently, we uphold the impugned order revision order of the CIT. - Decided against assessee. - ITA No. 761/Bang/2013 - Dated:- 12-4-2016 - Shri Abraham P George, Accountant Member And Shri Vijay Pal Rao, Judicial Member For the Appellant : Shri K. R. Pradeep, CA For the Respondent : Shri G. R. Reddy, CIT ( DR ) ORDER Per Vijay Pal Rao, JM This appeal by the assessee is directed against the .....

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order passed u/s 263 by the Learned CIT is erroneous having regard to the facts, circumstances and law on the issue. 3. That the order passed u/s 263 by the Learned CIT is barred by limitation requires to be cancelled. 4. The CIT erred in assuming jurisdiction u/s 263 without first satisfying that the assessment order suffered from an error which is prejudicial to the interest of revenue. 5. The CIT erred in issuing the notice u/s 263 when there was no error from the records available. 6. That .....

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9;ble Supreme Court in the case of Ajanta Pharma Ltd v CIT-327 ITR 303. 10. For the above and other grounds and reasons which may be submitted during the course of hearing of this appeal, the assessee requests that the appeal be allowed as prayed and justice be rendered. 3. The original assessment in this case was completed u/s 143(3) on 30/11/2006. Subsequently, on verification of records, the CIT noted that while allowing the claim of deduction u/s 80HHC, loss suffered under export of trading .....

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of the Act. Thereafter, the CIT passed revision order dated 12/2/2009 which was challenged by the assessee before this Tribunal in ITA No.518/Bang/2009 on the ground that the CIT has passed the impugned order dated 12/2/2009 without considering the reply filed by the assessee in response to the show cause notice. The Tribunal vide its order dated 30/10/2009, restored the matter to the record of the CIT to decide the issue after providing due opportunity of hearing to the assessee. Consequently, .....

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med by the assessee and allowed by the AO. The CIT further directed the AO to adopt the deduction u/s 80HHC at ₹ 67,47,326/- and compute the total income of the assessee as per normal provisions of the Act as well as u/s 115JB and then work out the tax liability. 4. Before us, learned AR of the assessee has submitted that so far as the computation of deduction u/s 80HHC(3), after setting off the loss in the export of trading goods, assessee has no grievance and therefore, the deduction u/s .....

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. He has further contended that this issue is covered by the judgment of the Hon ble Supreme Court in the case of Ajanta Pharma Ltd. vs. CIT (327 ITR 305) wherein the Hon ble Supreme Court has held that sec.115JB refers to levy of MAT on deemed income and sections 80HHC and 115JB operate in different spheres. Hon ble Supreme Court has observed that section 80HHC(1) refers to eligibility whereas sec.80HHC(3) refers to computation of tax incentive. Sec.115JB is a self-contained code as it taxes de .....

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IT vs. Hindustan Aeronautics Ltd. (203 Taxman 449) has taken a similar view by holding that deduction u/s 80HHC is available on full export profits while computing book profits and MAT liability of the assessee u/s 115JB. On the other hand, ld. DR has submitted that the CIT has already considered this issue in the impugned order and the issue involved in revision proceedings is only limited to the point of setting off the loss incurred by the assessee in the export of trading goods and therefore .....

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without setting off losses incurred by the assessee on export of trading goods. The AO, while completing the assessment u/s 143(3) allowed deduction u/s 80HHC at ₹ 4,48,59,326/- which was claimed by the assessee. The CIT noted that if loss suffered under export of trading goods was to be set off against the amount which bears to 90% of the export incentive, same proportion as the export turnover bears to the total turnover then, the deduction u/s 80HHC would be ₹ 67,47,326/-. This f .....

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e, there was no issue regarding allowing deduction u/s 80HHC on the full amount of export profit while computing MAT liability u/s 115JB. The CIT has directed the AO that while computing MAT liability under the provisions of sec.115JB, deduction u/s 80HHC shall be allowed after setting off losses suffered on export of trading goods. Therefore, there was no issue on the point of allowing deduction at 100% instead of 30% while computing MAT liability u/s 115JB. There is no quarrel as far as the ju .....

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