As long as an AO has taken a possible view of a matter after applying his mind to facts of case and legal provision, view so taken cannot be subjected to revision proceedings under section 263 merely because the Commissioner has a different view of that matter

DECIDED BY: ITAT MUMBAI `J’ BENCH, MUMBAI, IN THE CASE OF: Jewel Enterprises Vs. ITO APPEAL NO: ITA Nos. 6477 & 6478/Mum/07, DECIDED ON May 31, 2010

RELEVANT EXTRACTS:

3. The relevant material facts are as follows. The assessee is a partnership firm engaged in the business of manufacture and exports of stainless sheet utensils and other products. On 12th November, 2003, the assessee filed its income tax return disclosing a taxable income of Rs 1,51,330, after claiming deduction under section 80 HHC, in respect of export profits, amounting to Rs 49,16,854. The income tax return was duly accompanied by the profit and loss account and other financial statements, audit report , certificate under section 10CCAC etc. This income tax return was picked up for scrutiny assessment . The assessee attended these scrutiny assessment proceedings, produce the books of accounts in response to notice under section 142(1) dated 25th October 2004, and complied with the requisitions of the Assessing Officer from time to time. On 31st January 2006, the Assessing Officer finally passed an assessment order accepting the income returned by the assessee, and, in the assessment order so passed, inter alia, observed as follows:

On going through the profit and loss account , it is seen that the assessee has earned an amount of Rs 61,53,537 on Export Licences sales. As per section 28(iiia) of the Income Tax Act , profit on sale of licences granted under the Import (Control) Order 1955, made under the Imports & Exports (Control) Act , 1947 ( 18 of 1947), is chargeable to income tax under the head – “Prof its and Gains of Business or Profession”. However, due to later amendments of Section 28 and Section 80 HHC of the Income Tax Act , 1961, exporters having turnover of less than Rs 10.00 crores will now be eligible f or deduction in respect of Duty Entitlement Passbook Scheme.

In view of the above, the deduction, claimed by the assessee firm, of Rs 49,16,854 is al lowed under section 80HHC and return of income is accepted as it is.

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