EXPO MACHINERY LTD Vs. INSPECTING ASSISTANT COMMISSIONER
LAWS(IT)-1989-7-5
INCOME TAX APPELLATE TRIBUNAL
Decided on July 04,1989

Appellant
VERSUS
Respondents

JUDGEMENT

M.C. Agarwal, Judicial Member - (1.)THIS is an assessee's appeal against the order dated 27-1-1989 passed by the Commissioner of Income-tax, Delhi-VII, New Delhi in respect of the assessee's assessment for assessment year 1984-85, whereby he has set aside the assessment insofar as it related to deduction under Section 80HHC and directing the IAC(A) to restrict the said deduction within the limits prescribed by Section 80AB.
(2.)We have heard the learned counsel for the assessee and the learned Departmental Representative and have perused the material placed before us.
The assessee derives income, inter alia, from export of goods. The IAC(A) determined the assessee's total income at Rs. 16,62,404, out of which he allowed deduction for depreciation at Rs. 1,58,104 and deduction for entertainment expenditure under Section 37(2A) at Rs. 5,828. The net total income as determined by the assessing officer, thus, comes to Rs. 14,98,472 out of which he allowed deduction under Section 80HHC at Rs. 1,73,386.

(3.)THE Commissioner initiated action under Section 263, as, in his opinion, the export business of the assessee did not yield any income and the miscellaneous income, that was credited to the profit and loss account in the sum of Rs. 27,91,979, was not income from exports. A notice was issued to the assessee who in his objections disputed the Commissioner's assumption that there was any income to the extent of Rs. 27,91,979 credited to the profit and loss account. According to the assessee they were merely receipts from various sources and the income would have to be determined only after adjusting the corresponding expenditure. THE assessee further contended that Section 80AB had no application to the deduction admissible under Section 80HHC. In his order under appeal the Commissioner has negatived the assessee's contention that Section 80AB has no application. He has held that the overall limit prescribed by Section 80AB applies to the admissible deduction. So far as the assessee's contention that the aforesaid receipts of Rs. 27,91,979 did not represent net income, the learned Commissioner did not record any finding and it appears that while directing the IAC(A) to reframe the assessment according to law he meant that the IAC(A) was to determine the assessee's income from export business and then allow the deduction under Section 80HHC.


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