In assessment under sec 143(3) opportunity to the assessee to prove that it had fulfilled the condition of 3rd provision of sec 80HHC(3) is o be given

Last updated: 27 February 2012

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
Briefly stated facts of the case are that the assessee firm is engaged in the business of export. The scrutiny assessments u/s 143(3) were completed for the assessment years 2002-03 and 2003-04 on 31.1.2005 and 14.9.2005 determining the total income of the assessee at Rs.73,60,470/- and Rs.41,89,020/- as against the returned income of Rs.22,28,580/- and Rs.19,63,656/- respectively. On appeal , the ld. CIT(A), however, directed the AO to give opportunity to the assessee to prove that it had fulfilled conditions as provided under the 3rd proviso to section 80HHC(3) of the Income Tax Act, 1961 (the Act). Accordingly, fresh opportunity was provided to the assessee. The AO observed that the major addition to the returned income was on account of disallowance of deduction u/s 80HHC of the Act on account of sale of DEPB license. According to the AO, the assessee has not fulfilled the conditions laid down under the third Proviso to section 80HHC(3) and the Board Circular No.2/06 dated 17.1.2006 and, hence, the AO completed the assessments at the same income as assessed originally vide separate orders dated 4.3.2008. On appeal, the ld. CIT(A) following the decision of the Special Bench of the Tribunal in the case of Topman Exports vs. ITO (supra) directed the AO to treat the sale of DEPB license as per the order of the Tribunal (supra) and recalculate the deduction u/s 80HHC of the Act.

Citation :
Assistant Commissioner of Income Tax,Ci rcle-16(1),Matru Mandi r,Mumbai -400007. APPELLANT V/s M/s Mayfair International 16, Sarvodaya Mill Compound,Unit No.15(15) & 15(16),Tardeo Road,Mumbai-400034 PAN: AAFFM7392E RESPONDENT