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TMI Blog2015 (11) TMI 1757X X X X Extracts X X X X X X X X Extracts X X X X ..... excise/custom duty paid on material consumed for manufacturing of exported goods. 2. The CIT(A) has reduced the deduction u/s. 80HHC in view of provisions of section 80IB(13) read with 80IA(9) of the Income Tax Act, which is illegal and uncalled for. 3. That the CIT(A) has made addition amounting to Rs. 1,47,827/- on account of foreign travelling treated as personal expenses instead of business expenses, which is illegal and uncalled for. 4. That the order of the CIT(Appeal) is against law & facts." 2. Briefly stated, the facts relevant to ground No. 1 are that the assessee derives income from manufacturing and export of handloom goods. The assessee claimed deduction u/s. 80IB amounting to Rs. 32,28,340/-.The AO did not allow any ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounts of DEPB received by assessee as a supporting manufacturer. The ld. CIT(A) while sustaining the disallowance of deduction u/s. 80IB, has rested its conclusion on the stand that DEPB received by the assessee is not an income derived from the business eligible for deduction u/s. 80IB. For this, he has relied upon the case laws mentioned above. Per contra, the ld. Counsel for the assessee has placed strong reliance on the recent decision of Hon'ble Supreme Court in the case of CIT vs. Baby Marine Exports (2007) 290 ITR 323 (SC), wherein it has been categorically held that export house premium received by assessee as a supporting manufacturer forms an integral part of the sale price realized by the assessee from the export house. Besides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ex Court has held that the premium paid by the export house or the trading house to a supporting manufacturer is an integral part of the turnover of the supporting manufacturer and was thus includible in the profits of the business eligible for deduction u/s. 80HHC. Therefore, placing reliance on this decision the Tribunal in the case of Flora Exports (supra) held that the assessee was entitled for deduction u/s. 80IB in respect of sale of DEPB received as supporting manufacturer. Thus, in view of catena of decisions relied upon by the assessee, in our considered view, the conclusion of the ld. CIT(A) denying deduction u/s. 80IB qua purported DEPB receipt, is not found to be correct. No material is adduced by the ld. DR to take a contrary v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also observed that in this decision, ITAT, Mumbai has also considered the decision of ITAT Bengalore Bench in Mittal Clothing Co. vs. DCIT (2005) 4 SOT 626, which was decided in favour of the assessee. The assessee has assailed this issue by way of ground No. 2 before us. 5. On this count, the ld. Counsel for the assessee placed strong reliance on the decision of Hon'ble Mumbai High Court in the case of Associated Capsules (P) Ltd. vs. DCIT & Anr. 332 ITR 0042, wherein the issue has been decided in favour of the assessee and against the Revenue. He has also referred to the decision of Hon'ble Delhi High Court in the case of Great Eastern Exports vs. CIT (2011) 332 ITR 14 (Del.) which has been decided against the assessee and in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verse the order of the CIT(A) holding that deduction u/s. 80IB would not go to reduce the total income for the purpose of calculating deduction u/s. 80HHC. Accordingly, this issue is decided in favour of the assessee. 8. The last issue pertains to disallowance of Rs. 1,47,827/- on account of foreign traveling. The AO disallowed these expenses stating that the assessee debited expenses under the head foreign traveling expenses and claimed such expenses of Rs. 3,15,442/-, out of which no supporting bills/vouchers could be placed in respect such expenses of Rs. 1,47,827/-. The ld. CIT(A) also disallowed these expenses for want of any supporting evidence in the form of bills/vouchers. This disallowance has been assailed by way of ground No. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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