TMI Blog2012 (1) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... on relating to suppressed stock and turnover. c) Addition made u/s 43B of the Act. d) Deduction u/s 80HHC on DEPB receipts. 3. The facts relating the above said issues are stated in brief. The assessee herein is the proprietor of M/s Prasanthi Cashew Company located at Mangad, Kollam. He is engaged in the business of processing and exporting of cashew. The export turnover of the assessee consisted of both export of processed goods and export of trading goods. In the return of income filed for the year under consideration, the assessee claimed deduction of ₹ 96,62,109/- u/s 80HHC of the Act on the profit from export turnover. According to the assessing officer, the said deduction u/s 80HHC was wrongly computed by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to export of trading goods . U/s 80HHC(3)(c) of the Act, the profit derived from the export of trading goods shall be the export turnover in respect of such trading goods as reduced by the direct and indirect costs attributable to export of such trading goods. The dispute is with regard to the quantum of indirect costs attributable to the trading goods . The assessee has taken the total amount of indirect cost at ₹ 1,74,53,650/-, while the assessing officer has taken the same at ₹ 4,71,01,876/-. Though it is not clearly borne out of record, there appears to be no dispute with regard to the allocation of indirect costs between process export and trading export , which are to be carried out in accordance with the following for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench of the Tribunal has observed as under: The Commissioner (Appeals) view that as per the definition of indirect costs in Explanation (e) below sub section (3), except for the allocation between export turnover in respect of trading goods and total turnover in a case where the assessee have both exports and local sales, no other apportionment is contemplated, appeared to over look the import of the words attributable to such export appearing in clause (b) of sub-section (3). The definition of indirect costs must be governed or controlled by the words Attributable to such Export appearing in clause (b) of sub-section (3) since the attempt is to find out, in a reasonable manner, the profits derived from the export of trading goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sec. 80HHC(3), the profits derived from trading goods shall be the export turnover in respect of such trading goods as reduced by the direct and indirect costs attributable to export of such trading goods. If a particular type of indirect expense is proved to have been incurred only in respect of processed exports, in our view, the same could not be allocated to trading exports. Hence, in our view, the question of determination of such types of indirect costs requires re-examination. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of the assessing officer with a direction to determine the quantum of indirect costs as per the decisions relied upon by the assessee and also by duly considering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned issue afresh after affording necessary opportunity of being heard to the assessee. 7. The next issue relates to the disallowance of employer s contribution of PF/ESI made u/s 43B of the Act. The claim of the assessee is that he has made payment before the due date for filing the return of income and hence, by placing reliance on the decision of Hon ble Supreme Court in the case of Allied Motors (91 Taxmann 205) and Vinay Cements (213 CTR 268), it is contended that no disallowance is called for. We find force in the said contentions of the assessee. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of the assessing officer with a direction to verify the dates of payments of the i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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