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The respondent-assessee, in the present case, had in its return of income tax, claimed deduction under Section 80IA at Rs. 12.01 crores and Section 80HHC of the IT Act at Rs. 5.75 crores and declared the total income of Rs. 82.47 lacs. The AO allowed the deduction under Section 80IA to the tune of Rs. 14.04 crores and deduction under Section 80HHC to the tune of Rs. 2.42 crores.
Whether the Appellate Tribunal is right in law in holding that unrealised export turnover should be included in the Total Turnover while it is not treated as Export Turnover for purposes of computing the allowable deduction under Section 80HHC ?
Gross total income of the assessee is at Rs. 8,03,26,598 lakhs after adjusting the losses suffered by it in the eligible as well as profits of the non-eligible units. There are no brought forward losses or unabsorbed depreciation. The claim of deduction under section 80-IA was in respect of eligible unit 4.14 MW wind energy division at Rs. 4,72,28,143 and the deduction u/s.80HHC of the Act was claimed in respect of other units at Rs.15,51,440.
The issue involved in these appeals is, whether leasing rights can be considered to be ‘goods’ and whether transfer of such rights would constitute sale?” This issue is answered in favour of the assessee in the case of CIT v. B. Suresh [2009] 313 ITR 149. Following the said decision, these civil appeals filed by the Department are dismissed.
The question involved in this appeal is, whether excise duty and sales tax need to be included in the total turnover in the formula – ‘Business income’ multiplied by ‘export turnover’ and divided by ‘total turnover’ in Section 80HHC(3) of the Income Tax Act, 1961?
On consideration of the entire materials on record, we, therefore, find substance in the contention of the learned counsel for the petitioners that the impugned amendment is violative for its retrospective operation in order to overcome the decision of the Tribunal, and at the same time, for depriving the benefit earlier granted to a class of the assessees whose assessments were still pending although such benefit will be available to the assessees whose assessments have already been concluded.
Tribunal decision in the case of ITO Vs Gyani Exports as reported in 94 TTJ 557 wherein, it was held that gain from foreign exchange fluctuation as eligible for deduction u/s 80HHC. No contrary decision was brought to our notice by Ld. D.R. and hence, on this issue also, we decline to interfere in the order of Ld. CIT(A).
In the present case, according to the Finance Minister presenting the Bill, a valid piece of legislation has been wrongly interpreted by the Tribunal. We have already pointed out that according to the existing law, if a valid piece of legislation is wrongly interpreted by the Tribunal, the aggrieved party should move higher judicial forum for correct interpretation. As pointed by the Apex Court in the case of Pritvi Cotton Mills Ltd (supra), the legislature does not possess or exercise power to reverse the decision in exercise of judicial power.
In the said assessment year, the assessee had earned premium of Rs.12,26,140/- on sale of export quota. The Assessing Officer held that this premium is covered by Section 28 (iiia/b/c) and accordingly computed deduction under Section 80HHC but without giving benefit of provisos under sub Section (3) to Section 80HHC. He observed that the export turnover in the previous year was exceeding Rs.10 crores and the assessee had not complied with the several conditions mentioned in the provisos. The sale proceeds received from sale of quota rights were excluded from benefit under the provisos to Section 80HHC(3) as this was not the regular business income of the assessee.
In this case as found by the Commissioner of Income-tax (Appeals) the Assessing Officer in the course of assessment proceedings had called for the particulars regarding various items of income going into the computation of deduction under section 80HHC, for which the assessee had given the requisite details and particulars. Now the Assessing Officer has reopened the assessment to hold that the very same items of receipt has to be excluded in computing relief under section 80HHC. In other words, the Assessing Officer, on a reappraisal of the very same details, which was called for by him and furnished by the assessee, would like to come to a different conclusion. This clearly tantamounts to reopening is merely on a change of opinion.
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