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High CourtsDivision Bench(2011) 11 AHC CK 0064

The Commissioner of Income Tax and Another vs Virola International

Allahabad High Court · Decided on 1 November 2011

HON’BLE JUDGES
Sunil Ambwani, J · Kashi Nath Pandey, J
RESULT
Allowed
CASE NUMBER
Income Tax Appeal No. 70 of 2008

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Judgment

8 paragraphs · 365 words
1.

We have heard Shri A.N. Mahajan for the revenue. Shri Suyash Agarwal appears for the Assessee.

2.

It is submitted by Shri A.N. Mahajan, that the question, whether the receipt on sale of leather waste, pattern designing development, sample and job charge in Indian currency should be included in the total export turnover as well as in the total turnover for allowing deduction u/s 80-IA as well as u/s 80-HHC as per provisions of Section 80-IA(9A) of the Act, requires consideration of the Court. He has relied upon judgments in Liberty India v. Commissioner of Income Tax 317 ITR 218 (SC) as well as Malawar Industrial Co. Ltd v. Commissioner of Income Tax 243 ITR 83 (SC).

3.

In our opinion all the three questions require consideration by this Court. The appeal is thus admitted on the questions as follows:-

(1) Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in setting aside the order passed u/s 263 of the Act by coming to the conclusion that the assessment order could not be termed as errorneous and prejudicial to the interest of the revenue within the meaning of Section 263 of the Act.

(2) Whether the deduction u/s 80-HHC of the Act is to be allowed from the export profit without reducing the amount of deduction allowed u/s 80-IA of the Act.

(3) Whether the receipt on sale of ''Leather waste'', ''pattern designing development,'' ''sample'' and ''job charge'' in Indian currency should be included in the total export turnover as well as in the total turnover for allowing deduction u/s 80-IA as well as u/s 80-HHC as per provisions of Section 80-IA(9A) of the Act

4.

Shri Suyash Agarwal submits that the question No. 1 is no longer res integra in view of the judgment in CIT v. Max India Ltd 295 ITR 282 (SC). In Section 263 the phrase "prejudicial to the interest of the revenue" has to be read in conjunction with the expression erroneous. He submits that in the present case the order passed by the Assessing Officer was not erroneous in nature.

5.

The matter requires consideration at the time of hearing.