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TMI Blog2004 (5) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... ny which is engaged in the business of travel agency as a tour operator and is providing related services. The service rendered by the petitioner includes booking with hotels, airlines, railways and other transporters for tourists. For rendering such services, the petitioner receives commission from airlines. For the year ending on March 31, 1996 as also March 31, 1997, returns declaring income of Rs. 2,63,32,380 and Rs. 3,18,17,220 were filed on November 29, 1996 and November 28, 1997, respectively. In the computation of the income for the aforesaid assessment years, claim was made under section 80HHD of the Act. For the assessment year 1996-97 a deduction of Rs. 7,12,62,547 and for the assessment year 1997-98 deduction of Rs. 7,90,29,899 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as passed on Rs. 24.83 crores to other concerns who have provided services to the foreign tourists. For Rs. 24.82 crores, Form No. 10 CCAE have been issued. Therefore, the total receipt of foreign exchange during the year is Rs. 39.87 crores which includes substantial amount of advances in foreign exchange for which services have not been provided so far during the year by the assessee to the foreign tourists. The entire amount of Rs. 39.87 crores has not been included as gross income of the assessee in the profit and loss account." The same discussion is found for the other assessment year as well. The matter was carried in appeal and what the Commissioner of Income-tax (Appeals) has noted is as under: "Total convertible foreign exchang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h certificates were given to other hoteliers and transporters. The amount of Rs. 24.88 crores was excluded by the assessee from the total receipt of the business while computing deduction under section 80HHD of the Income-tax Act. In the order under section 143(3) as also before the Commissioner of Income-tax (Appeals), this amount was not included in total receipts for computing deduction under section 80HHD. However, as per sub-section (3) of section 80HHD, the deduction equals [eligible foreign exchange/total receipts of the business] x business income. Total receipts (which forms the denominator in the above formula) should include the foreign exchange receipts of Rs. 24.82 crores, since it is very much a part of the total receipts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices issued for the assessment years 1996-97 and 1997-98. However, a Division Bench of this court in Writ Petition (Civil) No. 4487 of 2003 by an order dated July 18, 2003, issued direction in view of the decision of the Supreme Court in the case of GKN Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19 to dispose of the objections filed by the petitioner with regard to his jurisdiction to reopen the assessment under section 147/148 of the Act, by a speaking order, before proceeding with the reassessment proceedings. It is required to be noted that instead of passing a separate speaking order on the objections raised, in gross violation of the order made by this court a regular order of assessment was passed. The said assessment orders were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is noted by the Assessing Officer in the assessment order itself. This clearly indicates that the Assessing Officer while framing the assessment had examined the factual aspect as well as applicability of the provisions of the Act and, particularly, section 80HHD of the Act and had, thereafter, arrived at a conclusion about the extent of availability of the benefit under section 80HHD of the Act. Learned counsel for the assessee has relied on the decision in the case of Jindal Photo Films Ltd v. Deputy CIT [1998] 234 ITR 170 (Delhi) for the proposition that change of opinion cannot be the basis of a reassessment even in the context of the law as changed from April 1, 1989. It was further contended that to confer the jurisdiction under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion was invited to the decision of the case, namely, Sheth Brothers v. Joint CIT [2001] 251 ITR 270 (Guj) which points out as to the manner in which the Assessing Officer is required to proceed while making an assessment. While allowing the petition in the case of Sheth Brothers [2001] 251 ITR 270 (Guj), the court pointed out the decision of the Supreme Court in the case of Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 wherein it was pointed out as under: "... there are three stages involved in every assessment, (i) disclosure of primary facts; (ii) inferences of facts to be drawn from the primary facts disclosed; and (iii) legal inferences to be drawn from the primary facts disclosed and the inferences of facts drawn from them. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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