- (1.) This appeal under Section 260A of the Income-tax Act, 1961 is at the instance of an assessee and is directed against an order dated 23rd June, 2004, passed by the Income-tax Appellate Tribunal, C Bench, Kolkata in Income-tax Appeal bearing ITA No.1220 (Kol) of 1997 for the Assessment Year 1991-92 and thereby dismissing the appeal filed by the assessee.
(2.) Being dissatisfied, the assessee has come up with the present appeal.
(3.) The facts giving rise to filing of the appeal may be summed up thus: a) The assessee is a public limited liability company within the meaning of the Companies Act, 1956 and the present appeal arises out of the assessment made under the Income-tax Act, for the Assessment Year 1991-92 for which the relevant previous year was the financial year ended on March 31, 1991. The assessee was amalgamated with M/s. Chand Chhap Fertilizers and Chemicals Limited with effect from January 01, 1994 pursuant to an order dated September 13, 1994 passed by this Court. The amalgamated company was renamed as Duncans Industries Limited with effect from November 01, 1994. b) The assessee carried on the business of inter alia, growing and manufacturing tea in its own tea estates (hereinafter referred to as the garden tea business ). Such tea was sold by the assessee not only in the domestic market but also by way of export outside India. c) Apart from the said garden tea business, the assessee carried on a separate business of exporting tea purchased by it (hereinafter referred to as the purchased tea business ). In respect of the said separately purchased tea business, the assessee maintained separate books of account. d) During the previous year ended on March 31, 1991, the assessee earned a profit of Rs.6,14,65,671/- in the purchased tea business which was separately disclosed in its accounts. e) In respect of the profit derived by the assessee from the exports of the aforesaid garden tea business and purchased tea business respectively, according to the assessee, it is entitled to deduction under Section 80HHC of the Act and as the two business were separate and distinct, the assessee claimed that the amount of deduction under Section 80HHC was required to be separately computed in respect of each of such businesses. f) The total turnover of the purchased tea business amounted to Rs.37,36,62,392/- and according to the assessee, it was entitled to deduction under Section 80HHC in respect of the entire profit of the purchased tea business which after making disallowance under the provisions of the Act amounted to Rs. 6,22,61,946/-. g) According to the assessee, the total turnover of the garden tea business was Rs.66,35,11,666/- of which the export turnover was Rs.2,91,07,747/-. The profit of the garden tea business amounted to Rs.6,05,64,776/- and accordingly, the assessee claimed deduction under Section 80HHC in respect of the garden tea business computed in the following manner: 6,05,764,776 X 2,91,07,747/66,35,11,666= Rs.26,56,930/-. h) The Chartered Accounts, while issuing the report in Form No.10CCCAC under Section 80HHC (4), took note of the fact that the purchased tea business and garden tea business were two distinct and separate businesses and accordingly, were separately computed and certified the quantum of deduction for each of the said business at Rs.6,22,61,946/- for purchased tea business and Rs. 26,56,930/- in respect of the garden tea business. The assessee in its return of income for the Assessment Year 1991-92 accordingly claimed deduction under Section 80HHC in respect of the aforesaid two amounts aggregating to Rs.6,49,18,876/-. i) The Assessing Officer by order dated March 18, 1994 accepted that the purchased tea business was a separate one and computed the profits thereof at Rs.6,25,02,070/- as against Rs.6,22,61,946/- returned by the assessee. However, instead of computing the deduction under Section 80HHC separately in respect of the purchased tea business and garden tea business with reference to the respective turnover of the said two business, the Assessing Officer aggregated the profits of all the business of the assessee, the export turnover of the two business and also aggregated the turnover of all the business of the assessee and he worked out the quantum of deduction under Section 80HHC at Rs.4,73,57,023/- by applying the provisions of sub-section (3) of Section 80HHC to the aggregate figures so arrived at by him. j) Being dissatisfied, the assessee preferred an appeal before the Commissioner of Income-tax (Appeal), who, however, by an order dated February 27, 1997 following his order dated February 24, 1997 for the Assessment Year 1990-91, declined to grant relief to the appellant. k) Against the identical issue involved in the assessee s case for the Assessment Year 1990-91, the appellant preferred separate appeals before the Income-tax Appellate Tribunal against the order of the Commissioner of Income-tax (Appeals) for the Assessment year 1990- 91 and 1991-92. l) The Tribunal by an order dated June 23, 2004 allowed the assessee s appeal for the Assessment Year 1990-91 but the appeal for the Assessment Year 1991-92 was dismissed. The Tribunal accepted that the purchased tea business and garden tea business were two separate and distinct businesses and that the Assessing Officer had separately computed the profits in respect of each of the two businesses. The Tribunal also took note of the fact that the distinct and separate nature of the two businesses was also accepted by the Assessing Officer for the Assessment Year 1994-95. After arriving at such findings, the Tribunal by the order impugned held that the purchased tea business was required to be considered on its own for the purpose of computing the deduction under Section 80HHC having regard to the provisions of sub-section (3) as in force during that year and in view of the amendment in sub-section (3) of the 80HHC by the Finance Act, 1990 with effect from April 1, 1991, the Tribunal declined to grant relief to the assessee for the Assessment year 1991-92.;