AI Structured Summary
Not yet generated for this judgment
Judgment
Heard the learned counsel for the revenue as well as Mr. Parthasarathy, learned counsel representing the respondent-assessee. Appeal came to be admitted, on the following substantial questions of law.
(i) Whether the Tribunal was correct in holding that the expenses reduced from the export turnover for the purpose of computing deduction u/s 10A of the Act has to be reduced from the total turnover?
(ii) Whether the Tribunal was correct in holding that the miscellaneous income received by the assessee on refund of Central Sales Tax, has to be included for the purpose of deduction u/s 10B of the Act, which is contrary to the provisions of the Section 10B of the Act.
(iii) Whether the Tribunal was correct in holding that the sum of Rs. 1,18,005/- claimed by the assessee as a deduction for having paid towards merchants overtime charges to the Excise Department, which pertain to the other assessment years has to be allowed in the current assessment year, when the assessee was following mercantile system of accounting?
Similar issues came to be considered by the Division Bench of the Principal Bench in several matters, which came to be disposed of on 30/8/2011 in ITA No. 70/2009 and others, in the case of CIT v. Tata Elxsi Ltd.
The substantial questions of law raised in the appeal in those appeals are similar to the substantial questions of law in the present appeal as well. The Principal Bench answered the substantial questions of law in favour of the assessee and against the revenue.
In that view of the matter, the present substantial questions of law 1 and 2 are answered against the revenue and in favour of the assessee.
So far as the third substantial question of law, it pertains to the claim made by the assessee for a deduction of Rs. 1,18,005/ having paid towards merchants overtime charges to the Excise Department According to the assessee, though it pertains to the earlier assessment years and was due, but the demand came to be made in the present assessment year and spent for the present assessment year, therefore, they have claimed the deduction for the assessment year 2004-05. So far as raising the demand for others, overtime charges amounting to Rs. 1,18,005/-, the revenue is not disputing. But, according to the revenue, it pertains to previous assessment year. Therefore, deduction cannot be allowed for the present assessment year. The fact remains that there was non-payment though it became due for the earlier assessment year, but, the demand came to be made in the assessment year 2004-05 and actually spent in the year 2004-05. Therefore, deduction was claimed at the time of filing returns. We are of the opinion, as there was demand for the assessment year 2004-05, the assessee was entitled to claim deduction in the assessment year in which such over time charges came to be paid by them. Therefore, the third substantial question of law is also answered in favour of the respondent-assessee and against the revenue.
Accordingly, the appeal stands dismissed.