Commissioner of Income Tax vs Eureka Sales Corpn.

The revenue is aggrieved by an order dated 16-11-2004 passed by the Income Tax Appellate Tribunal, Delhi Bench ''B'' in ITA No. 2568/Delhi/96 relevant for the assessment year 1991-92.

It appears that the assessee had claimed the benefit of Section 80HHC of the Income Tax Act, 1961 even though it had suffered a loss in its business activity. The assessing officer was of the view that the benefit of Section 80HHC of the Act was not admissible to the assessee because it had suffered a loss. The assessee preferred an appeal before the Commissioner (Appeals), who upset the order of the assessing officer and directed him to consider the effect of Section 80HHC insofar as the assessee is concerned even though it had suffered a business loss.

The assessing officer complied with the appellate order and applied the formula as laid down u/s 80HHC of the Act. Feeling aggrieved, the assessee filed an appeal before the Commissioner (Appeals) contending that the commission received by the assessee could not be included in the total turnover. This contention was not accepted by the Commissioner, who took a rather narrow view of the matter and concluded that the assessing officer was only required to give effect to the appellate order and could not look into other issues. The assessee then filed an appeal before the Tribunal and the decision of the Tribunal has given rise to this appeal u/s 260A of the Act.

The Tribunal noted that the question whether the assessee was entitled to contend that the commission was not to be included in the total turnover for the purposes of Section 80HHC of the Act was not agitated earlier because in the first round of litigation the only issue was whether the assessee could claim the benefit of Section 80HHC of the Act even though it had suffered a business loss. Therefore, the assessee did not have an opportunity of contending whether commission could be included in the total turnover of the assessee or not.

The Tribunal noted that a decision of the Special Bench of the Tribunal in (1994) 50 ITD 37 to the effect that commission could not be included in the total turnover for the purposes of Section 80HHC of the Act. The Tribunal was of the view that there is no reason to deny the assessee the benefit of this decision. In these circumstances, we cannot find any fault in the view taken by the learned Tribunal.

In any case, no substantial question of law arises in this case. The appeal is, therefore, dismissed.