MEKINS AGRO PRODUCTS P LTD Vs. ASSISTANT COMMISSIONER OF INCOME TAX
INCOME TAX APPELLATE TRIBUNAL
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R.P. Garg, Accountant Member -
(1.) THIS is an appeal by the assessee against the order of the Commissioner of Income-tax (Appeals) for asst. year 1990-91. Two grounds have been raised in this appeal. One is against levy of additional tax under Section 143(1A) and the other is against adjustment by reducing the deduction under Section 80HHC of the Income-tax Act, 1961.
(2.) The assessee, a private limited company, was engaged since its inception in 1984 in the business of manufacture of agricultural machinery, tools and implements and acted as a Merchant Exporter from the year 1989-90. For the year under consideration, it filed a return declaring a loss of Rs. 3,04,430 on 27-12-1990, which was accepted by the Assessing Officer under Section 143(1)(a) vide intimation dated 26-4-1991. Thereafter, a notice under Section 148 was issued to the assessee in response to which a fresh return was filed on 8-4-1993 declaring the same amount of loss. A fresh intimation under Section 143(1)(a) was sent to the assessee on 26-7-1993 determining the total income of the assessee at Rs. 11,04,130 by recomputing the deduction under Section 80HHC at Rs. 53,27,408 as against Rs. 66,37,879 claimed by the assessee. This adjustment was made by taking into consideration both the manufacturing and the trading activities together. An additional tax of Rs. 1,43,095 was accordingly levied under Section 143(1 A) of the Income-tax Act.
The assessee moved an application under Section 154 raising the following objections, inter alia :
1. Assessment under Section 143(1)(a) shall not be made on a return filed under Section 148 of the Act as the same cannot be treated as voluntary return required to be filed under Section 139(1).
2. Further action under Section 143(lA)(b) do not stipulate the levy of addl. tax for an asst. made under Section 147.
3. Our claim for deduction made under Section 80HHC of the Act, computing separate deduction for the two businesses is a question of law and shall not fall within the purview of 'prima facie adjustments'.
The request of the assessee was, however, rejected by the Assessing Officer, vide order dated 24-8-1993, by stating that the objections raised at SI. Nos. 1 and 2 above were not acceptable in view of the provisions of Section 148(1) and that the objection at SI. No. 3 was not acceptable in view of the provisions of Section 80HHC(3)(b) of the Act according to which the deduction has to be worked out proportionately by applying the following formula :-
Profits of the business x Export turnover Total turnover An appeal there against was filed by the assessee to the CIT (Appeals).
(3.) IN the meantime, an assessment under Section 143(3) read with Section 147 was made determining the total income of the assessee at Rs. 11,04,130, the figure at which the intimation was sent to the assessee under Section 143(1)(a) and by determining the deduction under Section 80HHC at Rs. 53,27,408 as against Rs. 66,37,879 claimed by the assessee. This order was also appealed against by the assessee before the CIT (Appeals).;
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