KASHMIR ARTS Vs. COMMISSIONER OF INCOME TAX
HIGH COURT OF DELHI
COMMISSIONER OF INCOME TAX VII
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S.Muralidhar, J. -
(1.) 1.1 This appeal under Section 260 A of the Income Tax Act, 1961 ('Act') is directed against the order dated 7th October, 2004 passed by the Income Tax Appellate Tribunal ('Tribunal'), Delhi Bench "G", New Delhi in M.A. No.159/Del/2004 in ITA No.3523/Del/1997. By the said impugned order the Tribunal dismissed the application filed by the Appellant before it under Section 254(2) of the Act seeking rectification of its order dated 30th September, 2003 by which it dismissed the Assessee"s appeal.
1.2 It requires to be noticed that the Appellant had challenged the main order dated 30th September, 2003 passed by the Tribunal dismissing ITA No. 3523/Del/1997, in ITA No.34 of 2005. However, on 18th February, 2005 the appellant withdrew the ITA No. 34 of 2005 and accordingly this Court dismissed the said appeal as withdrawn on that date. Further this Court framed the following question of law for consideration in the present appeal : "Whether the Income Tax Appellate Tribunal was correct in law in holding that the assessee is entitled to reduce interest paid by it from the interest received by it, while calculating deduction under Section 80-HHC (3A) read with Explanation (baa) of the Income Tax Act, 1961"" Upon perusing the orders in the present matter and hearing submissions of counsel, we find that the question ought to be re-formulated in the following manner:
"Whether the Income Tax Appellate Tribunal was justified in declining to entertain the rectification application and consequently the Assessee's contention that it is entitled to reduce the interest paid by it from the interest received by it, while calculating deduction under Section 80-HHC (3A) read with Explanation (baa) of the Income Tax Act, 1961""
(2.) The facts relevant for the present appeal are that for the Assessment Year 1993-94 the Assessee, which is in the business of exporting carpets, filed a return on 12th October, 1993 showing an income of Rs.12,04,030/-. Later on 3rd September, 1995 the Assessee filed a revised return disclosing an income of Rs.12,82,976/-. The case was processed by the Assessing Officer ('AO') under Section 143 (1) (a) of the Act.
(3.) While the assessment proceedings were in progress, the Assessee by its letter dated 19th September, 1995 claimed deduction of Rs.3,62,76,246/- (revised) under Section 80HHC of the Act. In addition, the Appellant furnished an explanation that it had deducted 10% of the receipts amounting to Rs.50,48,648/- from the total indirect cost while calculating the said deduction.;
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