TMI Blog2008 (9) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. That all the above grounds of appeal project the grievance of the appellant with regard to the exclusion of a sum of ₹ 8,08,915 for the purpose of computing income eligible for deduction under s. 80-I of the IT Act, 1961 (in short 'the Act'). According to the Revenue, sum of ₹ 8,08,915 represents income on account of export incentives and therefore, in light of the judgment of Hon'ble Punjab Haryana High Court in the case of Liberty India Ltd. vs. CIT (2007) 207 CTR (P H) 243: (2007) 293 ITR 520(P H) the said sum cannot be held to be income derived from the industrial undertaking and hence is not eligible for deduction under s. 80-I of the Act. The appellant candidly admits to the above position, but the plea set up is that denial of deduction on the income from export incentive is beyond the jurisdiction of the AO. According to the appellant, it is settled law that unless and until the AO has jurisdiction to tax a particular income or disallow a claim of deduction, the disallowance so made is not in accordance with law. Thus, the controversy in this appeal before us is limited inasmuch as, whether disallowance of deduction under s. 80-I of the Act on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders for asst. yrs. 1991-92 to 1993-94 held as under : 2. Brief facts in relation to ground No. 1 are that the assessee claimed deduction of ₹ 5,96,083 under s. 80-I. We find that in the case of the assessee itself, similar issue arose for asst. yrs. 1991-92 to 1993-94 in ITA Nos. 1506/1998 etc. dt. 22nd Nov., 2002 wherein the issue has been dealt at length by the Tribunal vide paras 7 to 7.5 and setting aside the order of the CIT(A) the matter has been restored to the file of the AO to redecide the same. We find that the facts are similar this year also. Therefore, respectfully following the order of the Tribunal dt. 22nd Nov.,2002 (supra) we set aside the order of the CIT(A) and restore the issue to the file of the AO for redeciding the same in the light of directions given therein. The ground stands accepted for statistics. 4. It is thus evident from the above that the Tribunal set aside the order of the CIT(A) and restored the issue to the file of the AO for re-deciding the same in light of the directions given in the order of the Tribunal in the case of the appellant for asst. yrs. 1991-92 to 1993-94 (ITA Nos. 1505 1506/Chd/1999 27/Chd/1998) dt. 22nd Nov., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. 1991-92 to 1995-96 and following the directions of the Tribunal AO granted deduction for asst. yrs. 1992-93 to 1995-96 vide separate orders for each of the five assessment year dt. 17th July, 2004. It was contended that even the order for the instant assessment year had been set aside to be redecided in light of the directions given for asst. yrs. 1991-92 to 1995-96 and therefore deduction under s. 80-I of the Act could not have been disallowed since the facts for asst. yr. 1996-97 were identical to the facts of the preceding assessment years namely, 1991-92 to 1995-96. Insofar as denial of deduction under s. 80-I of the Act on export incentives is concerned, it was submitted that the AO had traveled beyond the scope of the assessment proceedings to disallow the claim of deduction on an altogether fresh ground which was neither the subject matter of the original assessment proceedings before the AO nor the appellate proceedings before the Tribunal. 7. The CIT(A) after considering the submissions of the appellant held that the disallowance of claim of deduction under s. 80-I of the Act on the ground that the appellant was not able to furnish the information in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purposes of deduction under s. 80-I in view of the ratio of the abovementioned decision of the Hon'ble jurisdictional High Court. Therefore, in view of the directions of the Tribunal as above and applying the ratio of the latest decision of the Hon'ble Punjab Haryana High Court such deduction was rightly not allowed by the AO. These grounds of appeal of the appellant are accordingly decided as above and dismissed. 8. Before us the counsel for the appellant has contended that finding of the CIT(A) that deduction under s. 80-I of the Act could have been disallowed in the remand proceedings by the AO is neither justified on facts and nor in law. It was submitted that the original proceedings both before the AO as well as before the Tribunal were confined to the disallowance of claim of deduction under s. 80-I of the Act on the ground that the value of old plant and machinery was not within the limits specified under s. 80-I(2)(ii) of the Act and no more. It was submitted that, once the scope of original proceedings was limited such disallowance could not be made in the remand proceedings by the AO. It was his submission that, in this manner, the attempt of the AO was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held in its order dt. 26th May, 2005 that AO should decide the issue in light of the order of the Tribunal dt. 22nd Jan., 2002 for asst. yrs. 1992-92 to 1995-96. There is no dispute that even in the preceding years the claim of deduction was denied on identical basis which basis has now undisputedly been found erroneous both in the earlier years and in the instant year. This being the factual position, in our considered opinion the issue of export incentives was therefore never the subject matter of appeal before the Tribunal either in the proceedings for asst. yrs. 1992-93 to 1993-94 or in the proceedings for the impugned assessment year. In light of the above in our considered opinion the AO acted without jurisdiction to disallow the claim of deduction under s. 80-I of the Act on export incentives in the assessment made in pursuance to the direction of the Tribunal. In coming to the above conclusion we are supported by judgment of the Hon'ble Allahabad High Court in the case of S. P. Kochhar vs. ITO (1983) 37 CTR (All) 49 : (1984) 145 ITR 255 (All) wherein it has been held as under : What thus comes out is that the powers of the AAC are wider than those of the Tribunal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he must confine himself to the old sources of income which was the subject matter of appeal to the Tribunal. In a somewhat similar situation the Hon'ble Allahabad High Court in the case of CIT vs. Kamla Town Trust (1992) 102 CTR (All) 45 : (1992) 198 ITR 191 (All) made the following observations while upholding the order of the Tribunal : The Tribunal in its judgment dt. 1st Feb., 1978 has interpreted the order dt. 13th Aug., 1975 in ITA No. 427 (All) of 1974-75 as below vide para 6 of the judgment : 'We have carefully examined the rival submissions. In our opinion there is merit in the contention of the assessee, for the directions of the Tribunal while setting aside the orders of authorities below were 'to pass the order under s. 251/154 of the Act in the light of the observations made by us above'. 'The observations of the Tribunal have already been extracted above. The case was therefore not of setting aside and redetermination of the issue in accordance with law. The issue had been decided by the Tribunal and the matter was restored to the ITO only to give effect to the observations of the Tribunal. It was therefore in our opinion not open to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Such jurisdiction clearly excluded the action of the AO in disallowing the claim of the deduction with regard to export incentives. 14. The learned Department Representative has also made an argument that the Revenue would suffer in case the disallowance of deduction is not upheld. We have applied our mind to the said argument and observe that it is settled law that if an issue has acquired finality and loss has been caused to the Revenue as a result of such finality then the same has to be to the detriment of the Revenue. In fact the Hon'ble Supreme Court in the case of Parshuram Pottery Works Ltd. vs. ITO 1977 CTR (SC) 32: (1977) 106 ITR 1(SC) at p. 10 has observed as under : It has been said that the taxes are the price that we pay for civilization. If so it is essential that those who are entrusted with the task of calculating and realising that price should familiarise themselves with the relevant provisions and become well versed with the law on the subject. Any remissness on their part can only be at the cost of the national exchequer and must necessarily result in loss of revenue. (underlined, italicised in print, for emphasis by us] 15. On the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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