- (1.) This judgment will dispose of above noted two appeals since common issues are involved in both these appeals. These appeals have been filed by the revenue under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act ) against the common order dated 8-11-2004 of the Tribunal, Chandigarh Bench A , Chandigarh, in ITA No. 460/Chd/1998 for the assessment year 1994-95 and ITA No. 285/Chd/1999 for the assessment year 1994-95.
(2.) According to the revenue, the order of the Tribunal gives rise to the following substantial question of law: Whether the Tribunal was correct in law in setting aside order under Section 263 of the Act passed by the Commissioner directing the assessing officer not to ignore loss on export of trading goods for the purpose of computing deduction under Section 80HHC of the Act disregarding the fact that the law has been settled by the Hon ble Supreme Court in the case of IPCA Laboratory Ltd. v. Dy. CIT,
(3.) The respondent is a limited company and derives income from manufacturing of cotton yarn. For the accounting year relevant for the assessment year 1994-95, return declaring income of Rs. 18,76,090 was filed on 30-11-1994. The respondent assessee claimed deduction amounting to Rs. 5,96,147 under Section 80HHC of the Act. However, the assessing officer while computing deduction under Section 80HHC of the Act ignored loss on export of trading goods and computed the deduction at Rs. 7,35,435. The assessment was computed at an income of Rs. 26,67,350 vide order dated 18-12-1995 under Section 143(3) of the Act.;