DCIT, CHENNAI vs. SUNDARAM AUTO COMPONENTS LTD., CHENNAI

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ITA 1576/CHNY/2016Status: DisposedITAT Chennai21 October 2016AY 2004-054 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that excise duty and sales tax should be excluded from total turnover as per the Apex Court decision in CIT vs. Laskhmi Machine Works. Similarly, scrap sales proceeds should not be considered turnover if scrap is a byproduct of manufacturing, following CIT vs. Punjab Stainless Steel Industries.

What were the facts?

The Revenue appealed against the CIT(A)'s direction to exclude excise duty, sales tax, and scrap sales from total turnover for calculating deduction under Section 80HHC. The Assessing Officer had included these amounts in the total turnover.

What were the issues?

Whether excise duty, sales tax, and scrap sales should be included in the total turnover for the purpose of calculating deduction under Section 80HHC of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 80HHC

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, ‘ C’ BENCH : CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI ABRAHAM P. GEORGE]

For Respondent: Shri. R. Vijayaraghavan, Advocate

आदेश / O R D E R

PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER This appeal of the Revenue is directed against an order dated 10.02.2016 of the Commissioner of Income-tax (Appeals)-15, Chennai.

ITA No.1576/2016 :- 2 -:

Revenue has filed this appeal with a delay of ten days. 2.

1.

Petition for condonation has been filed. Fair reasons have been shown. Delay is condoned. Appeal is admitted.

Grievance raised by the Revenue is on the direction of the 3. ld. Commissioner of Income Tax (Appeals) to exclude excise duty, sales tax and scrap sales from total turnover while calculating deduction claimed by the assessee u/s.80HHC of the Income Tax Act, 1961 (herein referred as ‘’the Act’’).

Ld. Assessing Officer had added excise duty of 4.

�10,76,34,763/-, sales tax �2,96,94,516/- and scrap sales �24,48,474/- in the total turnover of the assessee while computing deduction u/s.80HHC of the Act.

5.

When assessee moved in appeal before ld. Commissioner of Income Tax (Appeals), the ld. Commissioner of Income Tax (Appeals) relying on the judgments of Apex Court in the case of CIT vs. Laskhmi Machine Works 290 ITR 667 and CIT vs. Punjab Stainless Steel Industries 364 ITR 144 directed the ld. Assessing Officer to exclude these amounts from the total turnover while computing the deduction u/s.80HHC of the Act.

ITA No.1576/2016 :- 3 -:

Now before us, ld. Departmental Representative submitted 6. that ld. Commissioner of Income Tax (Appeals) had relied on a decision of Co-ordinate Bench in the case of M/s. Sundaram Clayton Ltd for giving relief to the assessee. As per ld. Departmental Representative the decision had not reached finality.

Per contra, the ld. Authorised Representative strongly 7.

supported the orders of the authorities below.

We have considered the rival contentions and perused the 8. orders of the authorities below. In so far as excise duty and sales tax are concern, the Hon’ble Apex Court in the case of Laskhmi Machine Works (supra) clearly held that excise duty and sales tax were to be excluded from total turnover when working out the deduction available to the assessee u/s.80HHC of the Act. In so for as scrap sales their lordship in the case of Punjab Stainless Steel Industries (supra) held that where an assessee was not dealing in scrap but scrap was only what was left from the process of manufacturing, then proceeds of sale of such scrap should not be considered as part of the turnover. We are of the opinion that ld. Commissioner of Income Tax (Appeals) had rightly followed the judgment of Apex Court in the cases

ITA No.1576/2016 :- 4 -: of Laskhmi Machine Works (supra) and Punjab Stainless Steel Industries(supra) for giving relief to the assessee. We do not find any reason to interfere.

9.

In the result, the appeal of the Revenue is dismissed.

Order pronounced on Friday, the 21st day of October, 2016, at Chennai.

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