RAVINDRA HERAEUS PVT.LTD. vs. A.C.I.T.CIRCLE-1,UDAIPUR

While admitting the appeal on 24th November, 2010 the following substantial questions of law were framed:- “(1) Whether the Tribunal was justified in holding that the assessee is not entitled to claim the benefit of Section 80HHC in respect of the work done by the assessee under the name of “Job Charges”? (2) Whether the Tribunal was justified in reversing the findings of the CIT (Appeals) by holding that proceedings initiated under Section 148 for reassessment in respect of the assessment year in question are legal and proper and whether the findings recorded in paragraph 16 of the impugned order are legally justified?”

Learned counsel for the respondent has raised

Learned counsel for the appellant has fairly and frankly admitted this position and submitted that both the questions do not arise from the order as well as pleadings of the parties. However, he submitted that the questions, which arise in the present matter have been mentioned in Para 7 of the memo of appeal, therefore, the same may be considered as the substantial questions of law.

Learned counsel for the respondent submitted that none of the questions formulated in the memo of appeal can be said to be a question of law.

We have considered the submissions of learned counsel for the parties.

As admitted by learned counsel for the parties that the questions formulated by this Court on 24th November, 2010 do not arise from the pleadings of the parties. The said aspect is not in dispute, therefore, the order dated 24th November, 2010 to that extent is recalled.

We have again examined the present matter. It appears that the assessee claimed Rs.29,93,582/- as 3 amount forming part of business profit for ascertaining deduction under Section 80HHC. The submission of assessee was that this income was also from export income, therefore, the same is part of business profit for deduction under Section 80HHC of the Income Tax Act. The Assessing Officer did not agree with the submission of the assessee and consequently, deducted the saiid amount from business profit by treating the same as not directly related to the business activity of the assessee. The order of the Assessing Officer was reversed by Commissioner of Income Tax (Appeal). However, on an appeal filed by the assessee, the Income Tax Appellate Tribunal came to a conclusion that a sum of Rs. 8,37,581/- shown as net gain on exchange rate and Rs. 4,83,263/- shown as commission received are part of profit of business. Therefore, the assessee was entitled to deduction to that extent under Section 80HHC of the Income Tax Act.

So far as amount of Rs.14,00,817/- towards receipt from interest is concerned, the same was not treated as part of export income and the same was decided against the assessee.

So far as amount of Rs. 2,72,921/- shown as postage and insurance charges is concerned, the Tribunal has remanded the matter to Assessing Officer with a direction to verify each and every bill and find out the correct fact as to whether the assessee

This appeal has been preferred only in respect of amount of Rs.14,00,817/- claimed as interest received and Rs. 2,71,921/- claimed as postage and insurance charges. So far as postage and insurance charges is concerned, the matter has been remanded to the Assessing Officer and so far as amount of Rs. 14,00,817/- received towards interest is concerned, we find that the Income Tax Appellate Tribunal was absolutely justified in coming to a conclusion that the said amount cannot be business income. In these circumstances, we find that the judgment passed by the Income Tax Appellate Tribunal is based on factual aspect of the case and needs no interference by this Court.

In our view, no substantial question of law arises in the present case and appeal deserves to be dismissed and is hereby dismissed.