Jayshri Exports (India) Vs DCIT (ITAT Rajkot)
80HHC Relief Restored- No Discrimination Between Exporters Above & Below ₹10 Cr: ITAT Applies Supreme Court’s Avani Exports Ratio
Rajkot Tribunal dealt with the restriction of deduction u/s 80HHC. Assessee, a 100% exporter with turnover of ₹5.25 crore, filed return claiming deduction of ₹25,90,947/- u/s 80HHC. AO, applying the retrospective amendment brought by the Taxation Laws (Amendment) Act, 2005, excluded 90% of export incentives, computed a business loss of ₹79,10,629 & allowed only ₹2,17,759/-. CIT(A) upheld the AO’s computation by holding that the retrospective amendment applied even to exporters below ₹10 crore, & also held that the Supreme Court’s decision in Topman Exports & Gujarat HC judgment in Avani Exports did not help the Assessee.
Before the Tribunal, the Assessee relied on the later decision of the Supreme Court in CIT Vs Avani Exports & Anr., SLP No.9273/2013, wherein the Apex Court held that exporters with turnover below & above ₹10 crore must be treated similarly, as the retrospective insertion of the 3rd & 4th provisos could not operate to the detriment of any class of exporters. Tribunal observed that the Supreme Court had expressly held that both categories of exporters are equally eligible for 80HHC deduction & the retrospective amendment cannot deny the benefit. As the issue stood squarely covered by the Supreme Court, Tribunal held that the deduction claimed in the return must be allowed.
