TMI Blog2008 (3) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... l, Advocate for the appellant-revenue. Mr. Sanjay Bansal, Sr. Advocate instructed by Mr. Parvesh Saini, Advocate and Mr. Parshant Bansal, Advocate for the respondent-assessee. JUDGMENT The judgment of the court was delivered by Rakesh Kumar Garg, J . - 1. This judgment will dispose of above noted two appeals since common issues are involved in both these appeals. These appeals have been filed by the revenue under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') against the common order dated 8.11.2004 of the Income Tax Appellate Tribunal, Chandigarh Bench 'A', Chandigarh in ITA No.460/Chandi/1998 for the assessment year 1994-95 and ITA No.285/Chandi/1999 for the asessment year 1994-95. 2. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee and necessary verification was not made with reference to admissibility of the claim in accordance with the relevant provisions of law, therefore, the assessment order passed by the Authority, Ludhiana was not only erroneous but also prejudicial to the interest of revenue. While passing the said order dated 18.2.1995, the Commissioner of Income Tax (Central), Ludhiana directed the Assessing Officer to recompute the deduction under Section 80HHC of the Act after taking into consideration net result of both activities i.e. manufacturing and trading and not that only profit of one activity i.e manufacturing is to be considered and losses of the other activities i.e. trading are to be ignored. 5. The assessee feeling aggr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 ITR 521 (SC) has authoritatively held that while computing the deduction under Section 80HHC of the Act, the result of both manufacturing as well as trading activities has to be taken into account. Learned counsel for the appellant has also relied upon the judgement of the Hon'ble Supreme Court in A.M. Moosa v. Commissioner of Income Tax (2007) 294 ITR 1 (SC) to argue that the word "profit" in Section 80HHC (1)and (3) of the Act, 1961, means a positive profit and the deduction can be permitted only if there is a positive profit in the export of both self manufactured goods as well as trading goods and if there is a loss in either of the two then that loss has to be taken into account for the purpose of computing the profits. On the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest of revenue and therefore, the Commissioner of Income Tax was not justified in setting aside the order passed by the Assessing Officer by invoking the provisions of Section 263 of the Act. It was further argued that since the Assessing Officer after proper verification allowed the claim of the assessee under Section 80HHC of the Act which was supported by auditor's certificate and the view taken by him was one of the possible views allowable in accordance with law, the Assessing Officer had decided the issue on the basis of one of the possible views, the order can neither be erroneous nor prejudicial to the interest of revenue. Mr. Sanjay Bansal, Sr. Advocate has argued that in view of the decision rendered by the Hon'ble Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed under Section 263 of the Income-tax Act, 1961, two views on the said word "profits" existed. In our view the matter is squarely covered by the judgment of this Court in the case of Malabar Industrial Co. Ltd. v. CIT reported in [2000] 243 ITR 83 ; as also by the judgment of the Calcutta High Court in the case of Russell Properties P. Ltd v. A. Chowdhury, Addl. CIT [1977] 109 ITR 229 at 243." 11. In the case of Malabar Industrial Company Ltd. v. CIT (2000) 243 ITR 83 the Hon'ble Apex Court has taken the view that the phrase "prejudicial to the interests of the Revenue" under Section 263 of the Act has to be read in conjunction with the expression "erroneous" order passed by the Assessing Officer. Every loss of revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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