Kothari - (1.) THESE cross-appeals, one by the Revenue and the other by the assessee are directed against the order dated 24-3-1993 passed by the CIT(A) for assessment year 1989-90.
(2.) The assessee has raised the following grounds in its appeal :-- "1. Under the facts and circumstances of the case id. CIT(A) Jodhpur has erred in nut considering the interest receipts of Rs. 1,27,446 as part of business income while computing deduction under section 80HHC of Income-lax Act, 1961 under the facts and circumstances of the case. 2. He has further erred in allowing the deduction under section 80HHC on the business profits after deducting the claim under section 32AB, "Under the facts and circumstances of the case, the ld. CIT(A) has erred in confirming the disallowance to the following extent on account of personal user :-- a. Out of car & vehicle expenses to the extent of 1/5th of total claim i.e. Rs. 12,125. b. Out of depreciation on Motor car to the extent of 1/5th of total claim. c. Out of telephone expenses to the extent of Rs. 20,306," The Revenue has raised the following ground in its appeal : "On the facts and in the circumstances of the case, the Id. CIT(A) has erred in directing to consider the receipts from sale of export licence commission from sale of STC export counter, commission of shipping freight and processing charges of job work for working out the quantum of deduction under section 80HHC, ignoring the provisions of section 80HHC(1) which approves deduction only on profit derived from export of goods and merchandise only." 3. The assessee claimed deduction under section 80HHC at Rs. 7,25,881. Such a claim was made for the first time while filing the revised return which was revised on account of treating the amount of CCS as revenue receipt. The assessee submitted auditor's report in the prescribed form. The Assessing Officer disallowed the aforesaid claim on the ground that following items of income/receipt will not form part of "profits and gains of business" for purposes of deduction under section 80HHC :-- JUDGEMENT_8763_TLIT0_19990.htm The ACIT had further deducted Rs. 2,43,535 out of the profits of the business being the amount of deduction under section 32AB. This had resulted as under : JUDGEMENT_8763_TLIT0_19991.htm JUDGEMENT_8763_TLIT0_19992.htm The CIT(A) allowed the assessee's appeal in respect of items mentioned at (a) and (b) amounting to Rs. 8,25,512 and Rs. 71,174. The Revenue is in appeal against those items of income/receipts which were accepted by the CIT(A) as items of income assessable under the head "profits and gains of business" for purposes of grant of deduction under section 80HHC.
(3.) THE CIT(A), however, did not accept the assessee's contention in respect of interest receipts of Rs. 1,27,446 and also in respect of reduction of the profits of business by the amount of deduction allowable in section 32AB to tune of Rs. 2,43,535. THE assessee is in appeal against the confirmation of the action of the Assessing Officer in respect of these two items.;