TMI Blog2012 (5) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... idity of charging of interest u/s 234D of the Act. 3. The assessee is engaged in the business of manufacture and export of cashew kernels and cashew nut shell liquids. The return filed by the assessee was processed initially u/s 143(1) of the Act. In view of the amendment brought in by the Taxation Laws (Amendment) Act 2005 in section 80HHC of the Act, the assessment was reopened by the AO by issuing notice u/s 148 of the Act. The AO completed the assessment by making various additions. The assessee preferred appeal before Ld CIT(A), who allowed the appeal in part. Still aggrieved, the assessee is in appeal before us. 4. The first issue contested by the assessee is about the validity of re-opening of assessment of the year under consideration. The assessment for the asst. year 1999- 2000 has been reopened after completion of four years from the end of that assessment year. The assessment was not completed u/s 143(3), but the return of income was processed u/s 143(1) only. According to Ld A.R, the re-opening of assessment after four years, even in respect of assessment completed by processing the return of income u/s 143(1) of the Act, can be made only if the AO has reason to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee do not apply to the facts of the instant case. Accordingly we uphold the validity of re-opening of assessment. 7. The next issue relates to the assessment of DEPB benefits. At the time of hearing, the Ld A.R brought to our notice that the issue of taxability of DEPB receipts has since been settled by the Hon ble Supreme Court in the case of Topman Exports Vs. CIT reported in (2012)(247 CTR (SC) 353) and accordingly prayed that this issue may be set aside to the file of AO for fresh consideration in terms of the decision of Hon ble Supreme court referred supra. The Ld D.R also did not object to the said plea made by Ld A.R. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of AO with the direction to examine the issue of taxability of DEPB in accordance with the decision of Hon ble Supreme Court in the case of Topman Exports referred supra. 8. The next issue relates to the addition made on account of under pricing made in respect of sales effected to the sister concerns. The AO noticed that the average sale price of cashew kernel sold to the sister concerns was ₹ 186.93 per Kg, where as the average cost of prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e device to shift his profit to his sister concerns. Hence, we do not find any infirmity in the decision of ld CIT(A) in confirming this addition. 10. The last issue relates to the validity of charging interest u/s 234D of the Act. The Ld D.R submitted that this issue has since been settled by the Hon ble Jurisdictional Kerala High Court in the case of CIT Vs. Kerala Chemicals and Proteins Ltd reported in 323 ITR 584. Accordingly, we restore this issue to the file of AO with the direction to follow the principles laid down by the Jurisdictional High Court in the above cited case. 11. We shall now take the appeal relating to the assessment year 2003-04. The assessee did not press the ground numbered as (6) and hence the same is dismissed as withdrawn. The remaining grounds relate to the following issues:- (a) Assessment of DEPB receipts. (b) Exclusion of 90% of items credited to the Profit and Loss account as Expenses allocated and Cess refund under explanation (baa) of sec. 80HHC of the Act. (c) Aggregation of export turnover of two independent units for the purpose of computation of deduction u/s 80HHC of the Act. (d) Disallowance of claim of deduction u/s 80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld CIT(A) confirmed the said action of the AO. 17. We have heard the parties on this issue. The Ld A.R relied upon following decision in support of the view of the assessee. (a) Datamatics Ltd Vs. ACIT (2008) (110 ITD 24)(Mum) (b) CIT Vs. Sursh B Mehta (2007) (291 ITR 462) (Mad) In the instant case, the assessee has exported both cashew kernels and CNSL. As noticed by Ld CIT(A), the terms Export Turnover and Total Turnover have been defined in sec. 80HHC of the Act. Both the definition refers to the assessee and not undertaking as specified in some other sections. When the Export turnover and Total turnover of an assessee is required to be considered for the purpose of computing the deduction u/s 80HHC, in our view, it is not permissible to assessee to exclude certain turnover according to his convenience. Both the case law relied upon by the assessee are not applicable, since in those cases, the question of aggregation related to Export turnover and Domestic turnover , which is not the case in the instant case. The deduction u/s 80HHC is not available in respect of domestic turnover . Hence the significance of maintaining two separate books assumed import ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
