Commissioner of Income Tax, Delhi-I, New Delhi vs Auto Ignition Ltd.

The Commissioner of income tax (Appeals) has, relying upon an order passed by the Tribunal in the case of Commissioner of Income Tax Vs. Sudarshan Chemicals Industries Ltd., Rathi Engineering Works and Klockner Windsor (I) Ltd., held that sales tax and excise duty did not form part of the total turnover of the assessee in the context of the deductions admissible u/s 80HHC of the income tax Act, 1961. A similar view appears to have been taken by the High Courts of Calcutta, Karnataka and Madras in Subikash Roy Vs. Smt. Leena Chatterjee, Commissioner of Income Tax and Another Vs. Bharat Earth Movers Ltd., and The Commissioner of Income Tax, Tamilnadu-I, Madras Vs. Wheels India Limited, ) respectively. Mr. Goel, learned counsel for the revenue, did not, therefore, seriously dispute the proposition that sales tax and excise duty cannot form part of the total turnover of an assessee for purposes of deductions under the provisions mentioned above. What he argued was that there was no evidence in the present case before the Assessing Officer or the appellate authorities below to show that the assessee''s turnover of Rs. 23,93,86,360 did include the component of excise duty and sales tax. In the absence of any evidence, argued Mr. Goel, the deductions of excise duty and sales tax from the said turnover were legally impermissible.

There is, in our view, no merit in the submission of the learned counsel. A reading of the order passed by the Assessing Officer would show that the assessee had, during the course of the assessment proceedings, in writing claimed that the turnover figure as per profit and loss account for the year 1994-95 included the excise duty of Rs. 2,41,19,042 and sales tax of Rs. 49,07,992. This amount had, therefore, to be deducted out of the total turnover while granting deductions u/s 80HHC. The CIT (Appeals) and the Tribunal have, in that view, correctly followed the decision in Sudarshan Chemicals Industries Ltd.''s case (supra) and granted deduction u/s 80HHC after excluding from the turnover, the component of sales tax and excise duty paid by the assessee. No substantial question of law arises for consideration. Dismissed.