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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI JOGINDER SINGH & SHRI A.MOHAN ALANKAMONY
आदेश / O R D E R
Per A. Mohan Alankamony, AM:-
This appeal of the assessee is directed against the order passed by the Ld. Commissioner of Income Tax (Appeals)-11, Chennai dated 30.03.2016 in for the assessment year 2003-04 passed U/s.250(6) r.w.s. 143(3) & 254 of the Act.
The assessee has raised several grounds in its appeal however the cruxes of the issues are that:-
(i) The Ld.CIT(A) has erred in confirming the addition made by the Ld.AO by restricting the claim of deduction U/s.80HHC of the Act. (ii) The Ld.CIT(A) has erred in confirming the addition made by the Ld.AO amounting to Rs.2,66,62,467/- towards disallowance of provision for replacement of defective ‘O’ rings.
The brief facts of the case are that the assessee is a limited company engaged in the business of manufacturing automotive components like carburetors, fuel pumps, air suction valves, filed its return of income for the assessment year 2003-04 on 01.12.2003 declaring total income of Rs.33,79,83,399/-. Thereafter the case was taken up for scrutiny and certain additions were made and the assessee carried the matter on appeal, subsequently the Tribunal remitted the matter back to the file of Ld.AO. Thereafter on appeal the Ld.CIT(A) held the issue in favour of the Revenue, aggrieved by which the assessee is now in appeal before us.
At the outset the Ld.AR submitted that with respect to the issue regarding 80HHC of the Act, the Ld.Revenue Authorities did not 3 consider the first proviso to Section 80HHC(3)(a)(b)(c) of the Act wherein it was specifically stated as follows: “Provided that the profits computed under clause (a) or clause (b) or clause (c) of this sub-section shall be further increased by the amount which bears to ninety per cent of any sum referred to in clause (iiia) (not being profits on sale of a licence acquired from any other person), and clauses (iiib) and (iiic) of section 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee.”
The Ld.AR further relied in the decision of the Hon’ble Gujarat High Court in the case M/s. Avani Exports And Others Vs. CIT And Others reported in 348 ITR 391 which was not considered by the Ld.Revenue Authorities while deciding the issue. It was therefore pleaded that the matter may be remitted back to the file of Ld.AO for fresh consideration.
Similarly the Ld.AR submitted before us that with respect to the issue of provision for replacement of defective ‘O’ rings, the assessee may be given one more opportunity in order to present before the Revenue the correct computation for arriving at the accurate provision for replacement of defective ‘O’ rings to be claimed as deduction. The Ld.DR did not express serious objection for the same.
After hearing both sides, in the interest of justice, we are of the considered view that the matter is required to be re-examined by the Ld.AO and the assessee should be provided with one more opportunity
4 to present the entire facts and the legal matrix before the Revenue because as stated by the Ld.AR the relevant provisions of the statute and decision of the Hon’ble Gujarat High Court cited herein above were not considered by the Ld.Revenue Authorities while arriving at their decision. Further the assessee has also not furnished the appropriate computation with respect to the claim of deduction on account of provision for replacement of defective ‘O’ rings. Accordingly we hereby remit back the matter to the file of Ld.AO for de-nova consideration.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced on the 4th December, 2018 at Chennai.