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TMI Blog2003 (4) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... f the profit and loss account, the assessee was entitled to the benefit of section 80HHC of the Income-tax Act? 2. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the assessee had created the requisite reserve envisaged in the proviso to section 80HHC in its amended accounts in relation to the previous year in respect of which deduction was claimed by it and are not such creation of reserve and amendment of accounts impermissible and against the law?" The respondent-assessee is a closely held company carrying on business in tea auctioning and export of goods. In the assessment for the year 1986-87, the assessee claimed relief under section 80HHC of the Act. The Assessing Officer re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of the profit and loss account already finalised and approved by the annual general body which is not permissible. He also submitted that none of the appellate authorities had considered the question whether the re-opening of the profit and loss account was validly done except to rely on a communication issued by the Department of Company Law Affairs. The senior counsel accordingly submitted that both the appellate authorities had erred in allowing the claim under section 80HHC of the Act. The senior counsel also relied on the decisions of the Supreme Court in CIT v. Swadeshi Cotton and Flour Mills (P.) Ltd. [1964] 53 ITR 134; Tuticorin Alkali Chemicals and Fertilizers Ltd. v. CIT [1997] 227 ITR 172 and Indian Overseas Bank Ltd. v. CIT [1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1970] 75 ITR 253 which has taken the view that the profit and loss account can be amended to comply with the requirements of the proviso at any time before the completion of the assessment. Counsel further submitted that the Andhra Pradesh High Court in the decision mentioned above has left open the question as to what is the ultimate point of time beyond which entries cannot be made. Counsel has also brought to our notice the decision of the Madras High Court in CIT v. Sri Venkatesa Mills Ltd. [1999] 235 ITR 665, which has taken the view that the profit and loss account can be amended only till the finalisation of the assessment and thereafter it cannot be made. Counsel also submitted that when the company law under which the company is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated as one for meeting the technical requirements of taxation laws. The first appellate authority has not made any effort to find out whether the assessee's case satisfies the requirements of the communication. The Tribunal also has simply relied on the communication dated August 19,1987, issued by the Department of Company Law Affairs to hold that the assessee had satisfied the requirements of the proviso to section 80HHC. The Tribunal also did not consider as to whether the assessee had satisfied the conditions in the communication. In the circumstances without going further into the merits of the matter we are of the view that the matter has to be remitted to the Tribunal for fresh consideration of the question in the light of the commu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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