SHRI ANIL LAUL,HARYANA vs. ITO, NEW DELHI

It is in this backdrop that the detailed order, setting out reasons for our conclusions, is being pronounced today.

Grievances raised by the assessee are as follows:

The relevant material facts are like this. The assessee before us in an individual, and during the course of assessment proceedings, the claim of deduction under section 80HHF- an action which was confirmed by the CIT(A) as well. The matter thus travelled to the Tribunal at the instance of the assessee. In the first round of proceedings, at the request of the assessee, an SMC bench of this Tribunal, vide order dated 5th August 2011 remitted the matter to the file of the Assessing Officer by observing as follows:

When the matter travelled back to the Assessing Officer, the AO noticed that the assessee has not been able to prove any documentary evidence to substantiate the claim of having exported the software. The Assessing Officer rejected the claim of the assessee that the matter was remanded to the Assessing Officer for the limited verification with respect to the need of censorship certificate. It was noted that, in the assessment proceedings in the first round, the Assessing Officer had taken note of the claim of the assessee that an advance of Rs 72,26,553 was received from V Ranjit Khosla and Rs 21,00,000 from Nandu Thondwadi and these amounts were shown as current liabilities as advance against film exports. As the assessee could not substantiate the claim of exports, these amounts were treated as unexplained credits and deduction under section 80HHF was declined as the assessee could not produce any evidence of exports. When the matter travelled to the CIT(A) it was noted that since the same amounts have been added to the income of the assessee in 1997-98, vide order under section 143(3) r.w.s. 147 dated 29th March 2005. The assessee had only addressed the issue of double taxation and did not even deal with 80HHF at the stage of the CIT(A). However, when the matter travelled to this Tribunal, the Tribunal remitted the matter for the assessment years 1992-93 and 1997-98, the Tribunal remitted the matter for addressing the issue regarding validity of the assessment, and, on merits also, the matter was Assessment years 2000-01 Page 3 of 4 remitted to the file of the CIT(A) for fresh examination. The assessment year 2000-01, being a connected matter, also came up before the Tribunal and was remitted to the file of the CIT(A) for fresh adjudication. In the resultant proceedings, while the CIT(A) deleted the addition of Rs 65.91 lakhs for the assessment year 1997-98 as identity, capacity and means of the creditors were established, the CIT(A) also held that income from these advances, amounting to Rs 45.07 lakhs, was taxable in 2000-01. The CIT(A) also held that the assessee has failed to observations of the CIT(A) to the effect that claim under section 80HHF was not admissible and “the appellant has not been able to show that has met he all the conditions laid down under section 80HHF” When matter travelled again to the Tribunal, as noted earlier, the matter was remitted to the file of the AO with the observation as reproduced in the foregoing paragraph. During the course of these remanded proceedings, the assessee has not been able to produce any material evidencing the exports. Ranjit Khosla, the purported buyer of the film, had, however, appeared before the ITO and stated, on oath, that “these products were made available to civil society organizations in Latin and Central America though a network of friends and relative and to any interested party through the word of mouth”. On these facts, the Assessing Officer declined deduction under section 80HHF by stating that there is nothing on record to show that the conditions under section 80HHF are fulfilled. Aggrieved, assessee carried the matter in appeal before the CIT(A) but without any success. Learned CIT(A) noted that the assessee has not been able to file any evidence of exports, such as export invoices shipping bills and proof of delivery and dispatch etc, and as such deduction under section 80HHF cannot be allowed. The assessee is not satisfied and is in further appeal before us.

We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of applicable legal position.

Learned counsel for the assessee has made elaborate submissions on the proposition that censor certificate is not needed for such films as the films said to have been exported. That, however, does not appeal to us. We must first of all see as to whether the exports has actually taken place and whether the conditions under section 80HHF are complied with. Learned counsel fairly accepts that he is unable to give any evidence in respect of this aspect after such a long time and particularly as the assessee has passed away. He submits that the cassettes containing these films were taken by the buyers in their hand baggage and there is no evidence of actual exports in that sense. He, however, submits that based on circumstantial evidence and the statement made by Rajit Khosla, we could assume that the exports have actually taken place. In any case, the CIT(A), in the first round, declined section 80HHF on the ground that censorship certificate was not available and the assessee cannot be any worse off in the remanded proceedings.

We are unable to see any merits in the stand of the learned counsel. Our careful perusal of material on record indicates that at no stage the satisfaction of conditions under section 80HHF even came up for examination before the authorities below. The reference to censorship certificate was picked up from the arguments of the assessee, but that was not the limited aspect on which remand was made. All issues were left open as the adjudication was to be done de novo. In these circumstances, satisfaction of section 80 HHF conditions cannot be assumed or inferred. Unless the assessee specifically satisfies these condition, deduction under section 80HHF is out of question. The authorities below were thus justified in rejecting

In view of the above discussions, as also bearing in mind entirety of the case, we approve the conclusions arrived at by the authorities below, and decline to interfere in the matter.

In the result, the appeal is dismissed. Pronounced in the open court today on the 23rd day of August, 2018.