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DATE: April 24, 2018 (Date of pronouncement)
DATE: May 2, 2018 (Date of publication)
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CITATION:
S. 10A: If deductions on freight, telecommunication and insurance attributable to the delivery of computer software u/s 10A of the IT Act are allowed only in Export Turnover but not from the Total Turnover then, it would give rise to inadvertent, unlawful, meaningless and illogical result which would cause grave injustice to the assessee which could have never been the intention of the legislature As the object of the formula is to arrive at the profit from export business, expenses excluded from export turnover have to be excluded from total turnover also. Otherwise, any other interpretation makes the formula unworkable and absurd

In the instant case, if the deductions on freight, telecommunication and insurance attributable to the delivery of computer software under Section10A of the IT Act are allowed only in Export Turnover but not from the Total Turnover then, it would give rise to inadvertent, unlawful, meaningless and illogical result which would cause grave injustice to the Respondent which could have never been the intention of the legislature. The definition of total turnover given under Sections 80HHC and 80HHE cannot be adopted for the purpose of Section 10A as the technical meaning of total turnover, which does not envisage the reduction of any expenses from the total amount, is to be taken into consideration for computing the deduction under Section 10A. When the meaning is clear, there is no necessity of importing the meaning of total turnover from the other provisions. If a term is defined under Section 2 of the IT Act, then the definition would be applicable to all the provisions wherein the same term appears. As the term ‘total turnover’ has been defined in the Explanation to Section 80HHC and 80HHE, wherein it has been clearly stated that “for the purposes of this Section only”, it would be applicable only for the purposes of that Sections and not for the purpose of Section 10A. If denominator includes certain amount of certain type which numerator does not include, the formula would render undesirable results.

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DATE: April 27, 2018 (Date of pronouncement)
DATE: April 30, 2018 (Date of publication)
AY: 2001-02
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S. 80HHC: Law laid down in Baby Marine Exports 290 ITR 323 & Sushil Kumar Gupta 210 TM 251 (SC) is not correct. Question whether supporting manufacturer who receives export incentives in the form of duty draw back (DDB), Duty Entitlement Pass Book (DEPB) etc. is entitled for deduction u/s 80HHC is referred to the larger Bench

we are not in the agreement with the decisions in Baby Marine Exports 290 ITR 323 & Sushil Kumar Gupta 210 TM 251 (SC) and as Explanation (baa) of Section 80HHC specifically reduces deduction of 90% of the amount referable to Section 28 (iiia) to (iiie) of the IT Act, hence, we are of the view that these decisions require re-consideration by a larger Bench since this issue has larger implication in terms of monetary benefits for both the parties

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DATE: January 16, 2017 (Date of pronouncement)
DATE: May 22, 2017 (Date of publication)
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Supreme Court issues strictures against the income-tax department stating that it is "extremely unhappy" with the delay of 3381 days in refiling the SLP and demands that "The concerned authorities need to wake up"

We are extremely unhappy with the delay of 3381 days in refiling the special leave petition but make no other comment. The concerned authorities need to wake up.

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DATE: February 18, 2016 (Date of pronouncement)
DATE: March 1, 2016 (Date of publication)
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CITATION:
S. 80HHC: Sale proceeds of scrap cannot be included in total turnover

The issue in these appeals pertains to the question whether the proceeds generated from the sale of scrap would be included in the total turnover. In the recent decision of this Court in Commissioner of Income Tax Vs. Punjab Stainless Steel Industries & Ors. reported in [2014] 364 ITR 144 (SC) it has been held that sale proceeds generated from the sale of scrap would not be included in the total turnover for the purpose of deduction under Section 80HHC of the Income Tax Act, 1961

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DATE: December 10, 2015 (Date of pronouncement)
DATE: January 29, 2016 (Date of publication)
AY: -
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Controversy on whether s. 80-1A(9) mandates that the amount of profits allowed as deduction u/s 80-1A(1) has to be reduced from the profits of the business of the undertaking while computing deduction under any another provisions under heading C in Chapter VI-A of the Income-tax Act, 1961 referred to larger Bench

While Hon’ble Mr. Justice Anil R. Dave took the view that the judgement of the Delhi High Court in Great Eastern Exports v. Commissioner of Income-Tax2 [2011] 332 ITR 14 (Delhi) lays down the correct position in law and allowed the appeals of the Revenue, Hon’ble Mr. Justice Dipak Misra dissented and held that the law laid down by the Bombay High Court had in Associated Capsules Private Limited v. Deputy Commissioner of Income Tax and another [2011] 332 ITR 42 (Bom) lays down the correct position in law and dismissed the appeals of the Revenue. In view of difference of opinion, the matters have been referred to a larger Bench

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DATE: April 1, 2015 (Date of pronouncement)
DATE: April 8, 2015 (Date of publication)
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S. 80HHC: It is a pre-requisite that there must be profits from the export business. If the exports business has suffered a loss, deduction cannot be allowed from domestic business

From the scheme of Section 80HHC, it is clear that deduction is to be provided under sub-section (1) thereof which is “in respect of profits retained for export business”. Therefore, in the first instance, it has to be satisfied that there are profits from the export business. That is the pre-requisite as held in IPCA and A.M. Moosa as well. Sub-section (3) comes into picture only for the purpose of computation of deduction. For such an eventuality, while computing the “total turnover”, one may apply the formula stated in clause (b) of subsection (3) of Section 80HHC. However, that would not mean that even if there are losses in the export business but the profits in respect of business carried out within India are more than the export losses, benefit under Section 80HHC would still be available

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DATE: December 17, 2014 (Date of pronouncement)
DATE: January 10, 2015 (Date of publication)
AY: 1996-97
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CITATION:
S. 80-IA/ 80HHC: Despite the introduction of 'block of assets' depreciation cannot be thrust on the assessee while computing quantum of eligible deduction

Depreciation is optional to the assessee and once he chooses not to claim it, the Assessing Officer cannot allow it while computing the income. Further, once depreciation is optional, it will be optional for block of assets also. It is not necessary that the depreciation is allowable or not allowable as a whole. The assessee can claim it partly also in respect of certain block of assets and not claim in respect of other block of assets. Accordingly, for purposes of sections 80HHC and 80-IA, depreciation not claimed for by the assessee cannot be allowed as a deduction despite the introduction of the concept of block of assets

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DATE: August 13, 2014 (Date of pronouncement)
DATE: October 12, 2014 (Date of publication)
AY: 2003-04
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S. 80HHC: Deemed credit under the CENVAT Incentive Scheme is part of the business profits eligible for deduction u/s 80HHC

We agree with the submission of Ms Vissanjee that the said CENVAT incentive being the refund of tax and duty paid on inputs consumed for goods manufactured and exported would automatically reduce the cost of manufacture of the exported goods, …

CIT vs. Valiant Glass Works Pvt.Ltd (Bombay High Court) Read More »

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DATE: September 18, 2014 (Date of pronouncement)
DATE: October 5, 2014 (Date of publication)
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CITATION:
Reopening of s. 143(1) assessment on the basis of the retrospective amendment of section 80HHC of the Act by the Taxation Law (Amendment) Act, 2005 is bad as the said amendment is struck doen in Avani Exports vs. CIT (Guj HC)

We find force in the contentions of the Revenue as the assessment order which was sought to be reopened by the Assessing Officer was only an intimation under section 143(1) of the Act and not a regular assessment under section …

ACIT vs. M/s Northern Tannery (ITAT Lucknow) Read More »