Meghmani Organics Ltd., Ahmedabad V. The DY.CIT., Cent.Circle-1(1), Ahmedabad

ITA 2166/AHD/2011

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9339 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 24-01-2017
• Assessment Year: 2000-2001
• Appeal Filed On: 01-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Retrospective amendment
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 80HHC; 80IB; 80IA; 80HH; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 2166/AHD/2011 (ASSESSMENT YEAR: 2004-05) MEGHMANI ORGANICS LIMITED MEGHMANI HOUSE, SHRINIVAS SOCIETY, VIKAS GRUH ROAD, AHMEDABAD-7 V/S DCIT, CENTRAL CIRCLE-1(1), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AABCM0644E APPELLANT BY : MS. URVASHI SODHAN, AR RESPONDENT BY : SHRI K. MADHUSUDAN, SR. D.R. ( )/ ORDER DATE OF HEARING : 31 -01-201 7 DATE OF PRONOUNCEMENT : 07 -02-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)- I, AHMEDABAD DATED 02.06.2011 PERTAINING TO A.Y. 20 04-05. ITA NO. 2166 /AHD/2011 . A.Y. 2004-05 2 2. THE ASSESSEE HAS RAISED SEVEN SUBSTANTIVE GROUNDS O F APPEAL WHICH WILL BE DEALT ONE BY ONE. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AT LENGTH. HAVING HEARD THE RIVAL CONTENTIONS, WE HAVE CAREFULLY PERUSED THE ORDERS O F THE AUTHORITIES BELOW AND WE HAVE ALSO CONSIDERED THE JUDICIAL DECISIONS RELIED UPON BY BOTH SIDES. 4. THE ASSESSEE IS IN THE BUSINESS OF MANUFACTURING OF DYE, DYE INTERMEDIATES, PIGMENTS AND OTHER CHEMICALS. THE ASSESSMENT WAS FR AMED U/S. 143(3) OF THE ACT BY MAKING CERTAIN ADDITIONS/DISALLOWANCES/D ENYING THE CLAIM OF DEDUCTIONS WHICH WERE AGITATED BY THE ASSESSEE BEFO RE THE LD. CIT(A) BUT COULD NOT SUCCEED, HENCE THE ASSESSEE IS BEFORE US. 5. THE FIRST GROUND RELATES TO THE EXCLUSION OF EXCISE DUTY AND SALES TAX FROM TOTAL TURNOVER WHILE COMPUTING DEDUCTION U/S. 80HHC AFTER INSERTION OF SECTION 145A. THE ASSESSEE STRONGLY CONTENDS THAT D ESPITE OF THE INSERTION OF SECTION 145A COMPONENTS OF SALES TAX AND CENTRAL EXCISE DO NOT FORM PART OF SALE PROCEEDS FOR THE PURPOSE OF SECTION 80 HHC OF THE ACT. WE FIND THAT AN IDENTICAL ISSUE WAS CONSIDERED BY THE HONB LE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE CASE OF DYNTEX DYECHEM LTD. IN TAX APPEAL NO. 1364 OF 2008 224 TAXMANN.COM 224. WE FIND THAT THE HONB LE JURISDICTIONAL HIGH COURT HAD DECIDED THIS ISSUE IN FAVOUR OF THE ASSES SEE CONSIDERING THE PROVISIONS OF SECTION 145A OF THE ACT. THE RELEVANT FINDINGS OF THE HONBLE HIGH COURT READ AS UNDER:- ITA NO. 2166 /AHD/2011 . A.Y. 2004-05 3 7. A PPLYING RATIO LAID DOWN BY THE HON'BLE SUPREME COUR T IN THE CASE OF LAKSHMI MACHINE WORKS (SUPRA) AND SHIVA TEX YARN LTD. (SUPR A} AS WELL AS RECENT DECISION OF THIS COURT IN TAX APPEAL NO. 884 OF 2006 AND OTHER ALLIED APPEALS, TO THE FACTS OF THE CASE ON HAND THE QUESTION RAISED IN THE PRESENT TAX APPEAL IS ANSWERED AGAINST THE REVENUE AND IT IS HELD THAT THE LEARNED TRIBUNAL HA S NOT COMMITTED ANY ERROR IN HOLDING THAT THE COMPONENTS OF SALES TAX AND CENTRA L EXCISE DO NOT FORM PART OF SALE PROCEEDS FOR THE PURPOSE OF SECTION 80HHC OF THE AC T DESPITE INSERTION OF SECTION 145A OF THE ACT. 6. RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. GROUND NO. 1 IS ALLOWED. 7. GROUND NO. 2 RELATES TO THE DEDUCTION WRONGLY COMPU TED U/S. 80HHC ON PROFITS AND TURNOVER OF COMPANY AS A WHOLE AND NOT UNIT WISE. 8. AN IDENTICAL ISSUE WAS CONSIDERED BY THE TRIBUNAL I N ASSESSEES OWN CASE IN ITA NO. 1201/AHD/2007 FOR A.Y. 2003-04 AND THE RELE VANT PART READS AS UNDER:- 9. THE NEXT ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) IN NOT ALLOWING THE DEDUCTION U/S.80HHC OF THE ACT ON UNITE-WISE PROFIT. 10. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE THAT THE ASSESSEE CLAIMED DEDUCTION U/S.80HHC OF THE ACT FOR VATVA UNIT-II, A GRO DIVISION, PANOLI UNIT AND BOMBAY UNIT. THE ASSESSEE IS MAINTAINING SEPARATE A CCOUNTS AND THE ACCOUNTS ARE SEPARATELY AUDITED. THIS FACT HAS ALSO BEEN NOT ED BY THE ASSESSING OFFICER THAT ON VERIFICATION OF RETURN, IT WAS FOUND THAT ASSESS EE HAD SUBMITTED VARIOUS AUDIT REPORTS OF THOSE DIVISIONS, WHERE EXPORT PROFIT WAS EARNED AND SEPARATE ACCOUNTS WERE MAINTAINED FOR DOMESTIC SALES UNITE-WISE. THE ASSESSING OFFICER DISALLOWED THE DEDUCTION U/S.80HHC OF THE ACT BY CLUBBING THE EXPORT UNIT AND DOMESTIC UNITS AND COMPUTED THE U/S.80HHC BY TAKING EXPORT B USINESS AS A WHOLE INCLUDING DOMESTIC TURNOVER AND NOT SEPARATE UNITE- WISE. THE AO RELIED ON THE ORDER OF CIT(A) IN EARLIER YEARS, I.E. ASSESSMENT Y EARS 1999-00, 2000-01, 2001- ITA NO. 2166 /AHD/2011 . A.Y. 2004-05 4 02 AND 2002-03. WE FIND THAT IN ASSESSEE'S OWN CASE IN ITA NO.1347/AHD/2004, 535-536/AHD/2005 & 249/AHD/2005 DATED 12-06-2009, R ELYING ON THE CASE OF CIT V. PARRY AGRO INDUSTRIES LTD . (2002) 257 ITR 41 ( MAD) AND CIT V. RATHORE BROTHERS (2002) 254 ITR 656 (MAD) HAS ALLOWED THE CLAIM OF THE ASSESSEE VIDE PARA-5 & 6 AS UNDER:- 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. BOTH THE PARTIES BEFORE US AGREED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN ASSESSEE'S OWN CASE IN ITA NOS.1165 & 1 166/AHD/2001 (BY REVENUE) FOR ASSESSMENT YEAR 1998-99 AND 1997-98 AND ITA NOS . 3351 & 3352/AHD/2002 (BY ASSESSEE) FOR ASSESSMENT YEARS 1997-98 & 1998-9 9 DATED 17/11/2006. WE FIND THAT THE TRIBUNAL WHILE DECIDING THE ISSUE HAS OBSERVED AS UNDER:- '8. REGARDING GROUND NO.-3, LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY TRIBU NAL DECISION IN ASSESSEE'S OWN CASE BY ORDER DATED 20/10/2006 IN ITA NO.1774/AHD/2 003 FOR A.Y. 1999-2000 BY HOLDING AS UNDER '5.2. IN THE PRESENT CASE IN HAND, THE ASSESSING OF FICER HAS HELD THAT DEDUCTION UNDER SECTION 80HHC IS NOT AVAILABLE ON DIVISION/UNITEWISE PROFITS OF THE BUSINESS AND THE SAME IS AVAILABLE ON THE ENTIRE BUSINESS PR OFIT WITHOUT DIFFERENTIATING BETWEEN UNITS ENGAGED IN EXPORT AND UNITS ENGAGED I N DOMESTIC SALES. THEREFORE, BY FOLLOWING THE SAID DECISION OF THE TRIBUNAL, WE REVERSE THE FINDING OF THE CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE AS SESSING OFFICER TO DECIDE THE ISSUE IN THE LIGHT OF THE DECISION OF THE ITAT, IN THE CASE OF MADHUSUDAN IND. (SUPRA).' FURTHER RELIANCE WAS PLACED ON I) EASTERN LEATHER PRODUCTS P.LTD., 68 ITD 358 (DEL ); (II) J.H. SONI VS. ITO, 105 TAXMAN 197 (AHD); (III) CIT VS. PARRY AGRO INDUSTRIES LTD. 257 ITR 45 (MAD); (IV)CIT VS. RATHORE BROTHERS, 254 ITR 65 6 (MAD); (V) DCIT VS. MADHUSUDAN INDS. LTD. (VI)ITA NO.2136/AHD/1997 DATED 06/07/200 5 (PG 13-15 PARA5). 9. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED REC ORD. RESPECTFULLY FOLLOWING THE TRIBUNAL ORDER IN ASSESSEE'S OWN CASE (SUPRA), WE HOLD THAT DEDUCTION UNDER SECTION 80HHC IS TO BE ALLOWED ON UNITE-WISE BASIS, THIS GROUND OF REVENUE IS DISMISSED.' 6. FACTS BEING IDENTICAL, RESPECTFULLY FOLLOWING TH E PRECEDENT, WE ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE.' THE FACTS BEING EXACTLY IDENTICAL IN THIS YEAR ALSO AND RESPECTFULLY FOLLOWING THE TRIBUNAL'S DECISION IN ASSESSEE'S OWN CASE (SUPRA), WE ALLOW THE CLAIM OF THE ASSESSEE. THIS ISSUE OF THE ASSESSEE'S APPEAL IS AL LOWED. ITA NO. 2166 /AHD/2011 . A.Y. 2004-05 5 9. THE LD. D.R. CONTENDED THAT THIS ISSUE HAS TO BE DE CIDED IN FAVOUR OF THE REVENUE. RELIANCE WAS PLACED ON THE DECISION OF THE SINTEX INDUSTRIES LTD. 37 TAXMANN.COM 217 (GUJARAT). LD. COUNSEL FOR THE A SSESSEE, REBUTTING TO THE CONTENTION OF THE LD. D.R., STATED THAT THE DEC ISION GIVEN BY THE HONBLE COURT IN THE CASE OF SINTEX INDUSTRIES LTD. WAS CON SIDERED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF NIRMA LTD . IN TAX APPEAL NO. 360 OF 2016 AND HAS DECIDED THIS ISSUE IN FAVOUR OF THE AS SESSEE. THE RELEVANT PART READS AS UNDER:- 3. LEARNED COUNSEL SHRI NITIN MEHTA FOR THE REVENUE PLACED HEAVY RELIANCE ON THE JUDGMENT IN THE CASE OF SYNCO INDUSTRIES LTD. (SUPR A). HE ALSO DREW OUR ATTENTION TO THE JUDGMENT OF THE DIVISION DATED 2.7.2013 IN T HE CASE OF SINTEX INDUSTRIES LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX RENDERED IN TAX APPEAL NO.261 OF 2012 TO CONTEND THAT THE COURSE ADOPTED BY THE T RIBUNAL IS ERRONEOUS AND THE VIEWS OF THE ASSESSING OFFICER AND CIT(APPEALS) WER E CORRECT. 10. THE HONBLE HIGH COURT FURTHER OBSERVED AS UNDER:- 6. IN THIS CONTEXT, ALLAHABAD HIGH COURT IN THE CAS E OF COMMISSIONER OF INCOME- TAX AND ANOTHER VS. MODI XEROX LTD . (SUPRA) FOUND THAT THE ASSESSEE WAS A MULTI- UNIT COMPANY CARRYING ON THREE DIFFERENT ACTIVITIES AND HAD THREE SEPARATE UNITS FOR SUCH ACTIVITIES. TWO OF THESE UNITS WERE PROFIT MAKING UNITS AND THE THIRD WAS A LOSS MAKING UNIT. QUA THE PROFIT MAKING UNIT, THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80HH AND 80I OF THE ACT. WITH THIS BACKGROUND, IT WAS HELD AND OBSERVED AS UNDER: '37. WE HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE LAW LAID DOWN BY THE APEX COURT AND THE DECISION OF THE DELHI HIGH COURT REFERRED HEREINABOVE. IT IS NOT THE CASE OF THE ASSESSING AU THORITY THAT THE GROSS INCOME OF THE COMPANY WAS NIL. FROM A PERUSAL OF THE INCOME D ISCLOSED TO ALL THE THREE UNITS IT APPEARS THAT THE GROSS INCOME WAS NOT NIL AND TH EREFORE, THE ASSESSEE WAS ITA NO. 2166 /AHD/2011 . A.Y. 2004-05 6 ELIGIBLE TO CLAIM THE DEDUCTION UNDER SECTIONS 80HH AND 80-I OF THE ACT. AFTER BECOMING ELIGIBLE TO CLAIM THE DEDUCTION, THE QUEST ION FOR CONSIDERATION IS THAT WHETHER DEDUCTION IS ELIGIBLE TO THE INCOME DERIVED TO EACH INDUSTRIAL UNDERTAKING INDEPENDENTLY OR ON A CONSIDERATION OF LOSSES SUFFERED BY THE SERVICE UNIT. SECTIONS 80HH AND 80-I OF THE ACT CONTEMPLATE THE DEDUCTION FROM THE INCOME DERIVED BY THE UNDERTAKING. THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS RIGHTLY HELD THAT INCOME OF THE UNDERTAKING SHA LL BE CALCULATED ON A CONSIDERATION OF AN UNABSORBED BUSINESS LOSSES, ETC . IN RESPECT OF EACH INDIVIDUAL UNIT AND THEREAFTER ON THE PROFIT DERIVED BY THE UN IT THE DEDUCTION IS TO BE ALLOWED. THIS VIEW OF THE COMMISSIONER OF INCOME-TA X (APPEALS) CONFIRMED BY THE TRIBUNAL IS IN ACCORDANCE TO PROVISIONS OF THE ACT AS WELL AS IN CONSONANCE WITH THE LAW LAID DOWN BY THE APEX COURT AND THE DELHI H IGH COURT. THE APEX COURT IN THE CASE OF SYNCO INDUSTRIES LTD. VS. ASSESSING OFFICER (INCOME -TAX )(2008) ITR 444(SC) HAS HELD THAT THE NON OBSTANTE CLAUSE APPEA RING IN SECTION 80-I(6) OF THE ACT IS APPLICABLE ONLY TO THE QUANTUM OF DEDUCTION, WHEREAS THE GROSS TOTAL INCOME UNDER SECTION 80B(5) WHICH IS ALSO REFERRED TO IN SECTION 80-I(1) OF THE ACT IS REQUIRED TO BE COMPUTED IN THE MANNER PROVIDED U NDER THE ACT WHICH PRE- SUPPOSES THAT THE GROSS TOTAL INCOME SHALL BE ARRIV ED AT AFTER ADJUSTING THE LOSSES OF THE OTHER DIVISION AGAINST THE PROFITS DERIVED F ROM AN INDUSTRIAL UNDERTAKING. THE APEX COURT FURTHER HELD THAT UNDER SECTION 80-I (6) OF THE ACT FOR THE PURPOSES OF CALCULATING THE DEDUCTION, THE LOSS SUSTAINED IN ONE OF THE UNITS, CANNOT BE TAKEN INTO ACCOUNT BECAUSE SUB-SECTION (6) OF THE A CT CONTEMPLATES THAT ONLY THE PROFITS SHALL BE TAKEN INTO ACCOUNT AS IF IT WAS TH E ONLY SOURCE OF INCOME. THEREFORE, FROM THE DECISION OF THE APEX COURT, TWO PRINCIPLES OF LAW EMERGE ONE FOR THE PURPOSES OF COMPUTATION OF GROSS TOTAL INCO ME THE LOSSES OF OTHER UNITS ARE TO BE TAKEN INTO ACCOUNT BUT FOR THE PURPOSES O F CALCULATING THE DEDUCTION OF INDUSTRIAL UNDERTAKING, THE LOSS SUSTAINED IN ANOTH ER UNIT CANNOT BE TAKEN INTO ACCOUNT AND ONLY THE PROFIT SHALL BE TAKEN INTO ACC OUNT AS IF IT WAS THE ONLY SOURCE ITA NO. 2166 /AHD/2011 . A.Y. 2004-05 7 OF INCOME OF THAT UNIT. IN THIS VIEW OF THE MATTER, WE ARE OF THE VIEW THAT THERE IS NO ERROR IN THE ORDER OF THE TRIBUNAL.' 7. WE RESPECTFULLY AGREE WITH THE VIEW EXPRESSED BY ALLAHABAD HIGH COURT. THIS VIEW IS NOT IN CONFLICT WITH THE DECISION OF THE SU PREME COURT IN THE CASE OF SYNCO INDUSTRIES LTD. (SUPRA). IN SUCH CASE, IT WAS FOUND THAT THE ASSESSEE HAD TWO INDUSTRIAL UNITS NAMELY, ONE IN OIL AND ANOTHER IN CHEMICALS. THE ASSESSEE WAS MAKING PROFITS IN CHEMICAL UNIT BUT INCURRING LOSSE S IN OIL UNIT. IN THIS BACKGROUND, IT WAS HELD THAT WHILE COMPUTING GROSS TOTAL INCOME , INCOME SHOULD INCLUDE BOTH PROFIT IN CHEMICAL UNIT AND LOSS IN OIL UNIT. IF TH E RESULT THEREAFTER IS NIL, THE ASSESSEE CANNOT GET BENEFIT OF SPECIAL DEDUCTIONS U NDER SECTION 80HH AND 80I ETC. IN THE CONTEXT OF COMPUTATION OF DEDUCTION UNDER SECTION 80I , THE SUPREME COURT OBSERVED THAT WHILE COMPUTING QUANTUM OF DEDUCTION UNDER SECTION 80I(6) , THE ASSESSING OFFICER, NO DOUBT, HAS TO TREAT THE PROFI TS DERIVED FROM AN INDUSTRIAL UNIT AS THE ONLY SOURCE OF INCOME IN ORDER TO ARRIV E AT A DEDUCTIONS UNDER CHAPTER VI. IT WAS FURTHER OBSERVED THAT SECTION 80I(6) DEALS WITH ACTUAL COMPUTATION OF DEDUCTION WHEREAS SECTION 80I DEALS WITH TREATMENT TO BE GIVEN TO SUCH DEDUCTIONS IN ORDER TO ARRIVE AT TOTAL INCOME OF TH E ASSESSEE AND THEREFORE, WHILE INTERPRETING SECTION 80I(1) AS ALSO THE GROSS TOTAL INCOME, ONE HAS TO READ EXPRESSION 'GROSS TOTAL INCOME' AS DEFINED UNDER SECTION 80B(5) . IT WAS THEREFORE,CONCLUDED THAT THE LOSS FROM OIL DIVISION WAS REQUIRED TO BE ADJUSTED BEFORE DETERMINING GROSS TOTAL INCOME AND AS GROSS TOTAL INCOME WAS NIL, THE ASSESSEE WAS NOT ENTITLED TO CLAIM DEDUCTION UNDER SECTIONS 80I(6) WHICH INCLUDES SECTION 80I ALSO. 8. THIS JUDGMENT NOWHERE PROVIDES THAT WHILE COMPUT ING THE DEDUCTION UNDER SECTION 80HH OR 80I OR ANY OTHER SIMILAR PROVISION, LOSS OF ANO THER UNIT IS FIRST TO BE SET OFF. IT ONLY PROVIDES AND IN FACT, REINFORCE S THAT SUCH DEDUCTION HAS TO BE COMPUTED AS IF THE UNIT WAS AN ISOLATED INDUSTRY. H OWEVER, THEREAFTER WHILE COMPUTING GROSS TOTAL INCOME, EVEN THE LOSS HAS TO BE ACCOUNTED FOR AND ONLY IF ITA NO. 2166 /AHD/2011 . A.Y. 2004-05 8 THE INCOME IS POSITIVE, CAN THE ASSESSEE CLAIM DEDU CTION FOR ITS PROFIT MAKING ELIGIBLE INDUSTRY. THIS IS HOW EVEN THIS COURT IN T HE JUDGMENT IN THE CASE OF SYNCO INDUSTRIES (SUPRA) HAD USED OR VIEWED OR SITUATION AS CAN BE SEEN FROM THE FOLLOWING PORTION OF THE JUDGMENT REFERRING THE JUD GMENT IN THE CASE OF CANARA WORKSHOP (SUPRA). 'THE HON'BLE SUPREME COURT HAS FURTHER HELD THAT THE OBJECT OF SECTION 80E WAS PROPERLY SERVED ONLY BY CONFINING THE APPLICATION O F THE PROVISIONS OF THAT SECTION TO THE PROFITS AND GAINS OF A 'SINGLE INDUSTRY'. IN T HE PRESENT CASE, UNDER SECTION 80I(6) , PROFIT OF BADI UNIT ARE REQUIRED TO BE TREATED AS IF THAT WAS THE ONLY SOURCE OF INCOME. THAT THE LOSSES FROM THE DAMAN UNIT ARE REQUIRED TO BE IGNORED. THEREFORE, WHILE CALCULATING QUANTUM OF DEDUCTION, PROFIT OF THE BADI UNIT ALONE ARE REQUIRED TO BE TAKEN. TO THAT THERE IS NO DIFFI CULTY. HOWEVER, AFTER CALCULATING THE DEDUCTION ON THE BASIS THAT THE PROFITS FROM TH E BADDI UNIT WAS THE ONLY SOURCE OF INCOME, ONE HAS TO GIVE EFFECT TO THE COM PUTED DEDUCTION IN ORDER TO ARRIVE AT THE TOTAL INCOME OF THE COMPANY AND WHILE GIVING EFFECT, ONE HAS TO CONSIDER THE PROVISIONS OF SECTION 80IA AND 80IB OF THE ACT. IN OTHER WORDS, WHILE CONSIDERING THE GROSS TOTAL INCOME OF THE ASSESSEE, DEDUCTION UNDER SECTION 80IA AND 80IB OF THE ACT ARE REQUIRED TO BE ALLOWED AFTER ADJUST ING LOSS WORKED OUT IN OTHER UNITS.' 9. WE THEREFORE, DO NOT FIND ANY ERROR IN THE VIEW EXPRESSED BY THE TRIBUNAL FOLLOWING THE DECISION OF THE ALLAHABAD HIGH COURT. TAX APPEAL IS THEREFORE, DISMISSED. 11. A PERUSAL OF THE AFOREMENTIONED DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT CLEARLY SHOWS THAT THE HONBLE HIGH COURT HAS CONSIDERED THE DECISION GIVEN IN THE CASE OF SINTEX INDUSTRIES LTD . IT WOULD NOT BE OUT OF PLACE TO MENTION THAT THE DECISION IN THE CASE OF S INTEX INDUSTRIES LTD. ITA NO. 2166 /AHD/2011 . A.Y. 2004-05 9 (SUPRA) WAS DELIVERED ON 02.07.2013 AND THE DECISIO N IN THE CASE OF NIRMA LTD. WAS DELIVERED ON 30.06.2016. 12. RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE HIGH COURT (SUPRA), WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGA INST THE REVENUE. GROUND NO. 2 IS ALLOWED. 13. GROUND NO. 3 RELATES TO THE ADJUSTMENT OF TRADING E XPORTS LOSS AGAINST MANUFACTURING PROFIT WHILE COMPUTING DEDUCTION U/S. 80HHC. 14. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE FAI RLY STATED THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE REVENUE AND AGAIN ST THE ASSESSEE BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F IPCA LABORATORY LTD. 266 ITR 521 WHEREIN THE HONBLE APEX COURT HAS HELD IN PAGE 529:- 'WE ARE UNABLE TO ACCEPT THE SUBMISSION OF MR. DASTU R. UNDOUBTEDLY SECTION 80HHC HAS BEEN INCORPORATED WITH A VIEW TO PROVIDING INC ENTIVE TO EXPORT HOUSES. EVEN THOUGH A LIBERAL INTERPRETATION HAS TO BE GIVEN TO SUCH A PROVISION THE INTERPRETATION HAS TO BE AS PER THE WORDING OF THIS SECTION. IF THE WORDINGS OF THE SECTION ARE CLEAR THEN BENEFITS, WHICH ARE NOT AVAILABLE UNDER THE SECTION, CANNOT BE CONFERRED BY IGNORING OR MISINTERPRETING WORDS IN THE SECTION. IN THIS CASE WE ARE CONCERNED WITH THE WORDINGS OF SUB-SECT ION (3) OF SECTION 80HHC . AS NOTED EARLIER SUB-SECTION (3)(A) DEALS WITH CASE WHERE THE EXPORT S ONLY OF SELF MANUFACTURED GOODS. SUB SECTION 3(B) DEALS WITH THE CASE WHERE THE EXPORT IS ONLY OF TRADING GOODS. THUS WHEN THE LEGISLATURE WANTED TO TAKE EXPORTS FROM SELF MANUFACTURED GOODS OR TRADING GOODS SEPARATELY, IT HAS ALREADY SO PROVIDED IN SUB-SECTIONS (3)(A) AND (3)(B). IN ARRIVING AT THE FIGURE OF POSITIVE PROFIT, BOTH THE PROFITS AND THE LOSSES WILL HAVE TO BE CONSIDERED. IF THE NET FIGURE IS A POSITIVE PROFIT THEN THE ASSESSEE WILL BE ENTITLED TO A DEDU CTION. IF THE NET FIGURE IS A LOSS THEN THE ASSESSEE WILL NOT BE ENTITLED TO A DEDUCTI ON. SUB-SECTION (3)(C) DEALS WITH CASES WHERE THE EXPORT IS OF BOTH SELF MANUFACTURED GOODS AS WELL AS TRADING GOODS. THE OPENING PART OF SUB-SECTION (3)(C) STATE S 'PROFITS DERIVED FROM SUCH ITA NO. 2166 /AHD/2011 . A.Y. 2004-05 10 EXPORT SHALL'. THEN FOLLOW (I) AND (II). BETWEEN (I) AND (II) THE WORD 'AND' APPEARS. A PLAIN READING OF SUB-SECTION (3)(C) SHOWS THAT 'P ROFITS FROM SUCH EXPORTS' HAS TO BE PROFITS OF EXPORTS OF SELF MANUFACTURED GOODS PL US PROFITS OF EXPORTS OF TRADING GOODS. THE PROFIT IS TO BE CALCULATED IN THE MANNER LAID DOWN IN SUB-SECTIONS (3)(C)(I) AND (II). THE OPENING WORDS 'PROFIT DERIV ED FROM SUCH EXPORTS' TOGETHER WITH THE WORD 'AND' CLEARLY INDICATE THAT THE PROFIT S HAVE TO BE CALCULATED BY COUNTING BOTH THE EXPORTS. IT IS CLEAR FROM A READI NG OF SUB-SECTION (1) OF SECTION 80HHC(3) THAT A DEDUCTION CAN BE PERMITTED ONLY IF THERE IS A POSITIVE PROFIT IN THE EXPORTS OF BOTH SELF MANUFACTURED GOODS AS WELL AS TRADING GOODS. IF THERE IS A LOSS IN EITHER OF THE TWO THEN THAT LOSS HAS TO BE TAKEN INTO ACCOUNT FOR THE PURPOSES OF COMPUTING PROFITS. UNDER SECTION 80HHC(1) , THE DEDUCTION IS TO BE GIVEN IN COMPUTING THE TOT AL INCOME OF THE ASSESSEE. IN COMPUTING THE TOTAL INCO ME OF THE ASSESSEE BOTH PROFITS AS WELL AS LOSSES WILL HAVE TO BE TAKEN INT O CONSIDERATION. SECTION 80AB IS RELEVANT. IT READS AS FOLLOWS: '80AB. WHERE ANY DEDUCTION IS REQUIRED TO BE MADE OR ALLOWED UNDER ANY SECTION INCLUDED IN THIS CHAPTER UNDER THE HEADING 'C, - DE DUCTIONS IN RESPECT OF CERTAIN INCOMES' IN RESPECT OF ANY INCOME OF THE NATURE SPE CIFIED IN THAT SECTION WHICH IS INCLUDED IN THE GROSS TOTAL INCOME OF THE ASSESSEE, THEN, NOTWITHSTANDING ANYTHING CONTAINED IN THAT SECTION, FOR THE PURPOSE OF COMPUTING THE DEDUCTION UNDER THAT SECTION, THE AMOUNT OF INCOME OF THAT NA TURE AS COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT (BEFORE MAKING ANY DEDUCTION UNDER THIS CHAPTER) SHALL ALONE BE DEEMED TO BE THE AMOUN T OF INCOME OF THAT NATURE WHICH IS DERIVED OR RECEIVED BY THE ASSESSEE AND WH ICH IS INCLUDED IN HIS GROSS TOTAL INCOME.' SECTION 80B(5) IS ALSO RELEVANT. SECTION 80B(5) PROVIDES THAT 'GROSS TOTAL INCOME' MEANS THE TOTAL INCOME COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THE INCOME-TAX ACT . SECTION 80AB IS ALSO IN CHAPTER VI-A. IT STARTS WITH THE WORDS 'WHERE ANY DEDUCTION IS REQUIRED TO BE MADE OR ALLOWED UNDER A NY SECTION OF THIS CHAPTER'. THIS WOULD INCLUDE SECTION 80HHC . SECTION 80AB FURTHER PROVIDES THAT 'NOTWITHSTANDING ANYTHING CONTAINED IN THAT SECTION'. THUS SECTION 80AB HAS BEEN GIVEN AN OVERRIDING EFFECT OVER ALL OTHER SECT IONS IN CHAPTER VI-A. SECTION 80HC DOES NOT PROVIDE THAT ITS PROVISIONS ARE TO PREVAI L OVER SECTION 80AB OR OVER ANY OTHER PROVISION OF THE ACT, SECTION 80HHC WOULD THUS BE GOVERNED BY SECTION 80AB . THE DECISIONS OF THE BOMBAY HIGH COURT AND THE KE RALA HIGH COURT TO THE ITA NO. 2166 /AHD/2011 . A.Y. 2004-05 11 CONTRARY CANNOT BE SAID TO BE THE CORRECT LAW. SECTION 80AB MAKES IT CLEAR THAT THE COMPUTATION OF INCOME HAS TO BE IN ACCORDANCE W ITH THE PROVISIONS OF THE ACT. IF THE INCOME HAS TO BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT, THEN NOT ONLY PROFITS BUT ALSO LOSSES HAVE TO BE TAKEN INTO CONSIDERATION.' 15. RESPECTFULLY FOLLOWING THE HONBLE APEX COURTS DEC ISION (SUPRA), WE DECIDE THIS ISSUE IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. GROUND NO. 3 IS DISMISSED. 16. GROUND NO. 4 RELATES TO THE DENIAL OF GRANTING DEDU CTION U/S. 80HHC ON DEPB INCOME IGNORING THAT RULES OF DUTY DRAW BACK D OES NOT PRESCRIBE ANY ALLOCATION TOWARDS CUSTOM DUTY IN ITS PRODUCTS. 17. WHILE SCRUTINIZING THE RETURN OF INCOME, CASE RECOR DS AND SUBMISSIONS OF THE ASSESSEE, THE A.O. NOTICED THAT THE ASSESSEE HA S CLAIMED DEDUCTION U/S. 80HHC ON DEPB ALSO BY TREATING IT AS EXPORT INCENTI VE WITHIN THE MEANING OF SECTION 28(IIIA), 28(IIIB) & 28(IIIC) OF THE ACT . THE A.O. WAS OF THE OPINION THAT SINCE THE EXPORT TURNOVER OF THE ASSESSEE EXCE EDS RS. 10 CRORES. THE AMENDED PROVISIONS OF SECTION 80HHC SQUARELY APPLY WHICH HAS BEEN INSERTED BY GIVING IT WITH RETROSPECTIVE EFFECT FRO M 01.04.1998. THE A.O. ACCORDINGLY RECOMPUTED THE CLAIM OF DEDUCTION BY EX CLUDING INCOME ACCRUED/RECEIVED BY THE ASSESSEE ON ACCOUNT OF DEPB FROM THE ELIGIBLE PROFIT FOR DEDUCTION U/S. 80HHC OF THE ACT. ITA NO. 2166 /AHD/2011 . A.Y. 2004-05 12 18. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE VEHEMEN TLY STATED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIO N OF THE HONBLE SUPREME COURT GIVEN IN THE CASE OF AVANI EXPORTS 58 TAXMANN .COM 100. 19. PER CONTRA, THE LD. D.R. STATED THAT THE DECISION G IVEN IN THE CASE OF AVANI EXPORTS (SUPRA) IS ON LIMITED ISSUE OF THE AFOREMEN TIONED AMENDMENT, WHETHER IT IS PROSPECTIVE. IT IS SAY OF THE LD. D.R . THAT CLAUSES (IIIB) & (IIIC) OF SECTION 28 APPLY TO PRINCIPAL PORTION OF DEPB. THER EFORE, PRIOR TO 2005, THE ASSESSEE WAS NOT ENTITLED TO THE BENEFIT ON INCREAS E AS PER FIRST PROVISO TO SECTION 80HHC(3). 20. REBUTTING THE SUBMISSIONS MADE THE LD. D.R., THE LD . COUNSEL STATED THAT THE TRIBUNAL IN ITA NO. 2622/AHD/2011 HAS CONSIDERED A SIMILAR ISSUE AND DECIDED IT IN FAVOUR OF THE ASSESSEE. THE RELEVANT PART READS AS UNDER:- 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. WE FIND THAT THE TRIBUNAL (ITAT 'C' BENCH AHMEDABAD) IN ITA NO.776/AHD/2007 F OR Y 2003-04 (ASSESSEE'S OWN CASE) VIDE ITS ORDER DATED 30/10/2009 WAS PLEAS ED TO RESTORE THE ISSUE IN RESPECT OF DEDUCTION U/S.80HHC OF THE ACT, BY OBSER VING AS UNDER:- '9. RESPECTFULLY FOLLOWING THE ABOVE JUDGMENT OF THE TRIBUNAL, WE HOLD THAT PROFIT ELEMENT ON DEPB LICENCE WILL BE COVERED BY SECTION 28(IIID) AND, ACCORDINGLY, BY THIRD PROVISO TO SECTION 80HHC(3) OF THE I.T.ACT, 1961 AS THE TURNOVER OF THE ASSESSEE EXCEEDS RS.10 CRORES. THIS AMOUNT SHALL BE EXCLUDED FOR THE PURPOSE OF COMPUTING DEDUCTION U/S.80HHC OF THE I.T.ACT, 1961, IF CONDITION LAID DOWN IN THAT PROVISO ARE NOT SATISFIED. THE FACE VALUE OF T HE DEPB LICENCE WILL BE COVERED ITA NO. 2166 /AHD/2011 . A.Y. 2004-05 13 U/S.28(IIIB) OF THE I.T.ACT, 1961 AND, THEREFORE, 9 0% THEREOF WOULD BE ADDED TO THE EXPORT PROFITS AS PER FIRST PROVISO TO SECTION 80HHC(3) OF THE I.T.ACT.1961. 10. IN ORDER TO COMPUTE DEDUCTION U/S.80HHC OF THE I.T.ACT, 1961 IN ACCORDANCE WITH THE DECISION OF THE SPECIAL BENCH IN THE CASE OF M/S.TOPMAN EXPORTS (SUPRA), WE RESTORE THE MATTER TO THE FILE OF ASSESSING OFFI CER.' 4.1. THERE IS NO DISPUTE WITH REGARD TO THE FACT TH AT THE DECISION OF THE SPECIAL BENCH RENDERED IN THE CASE OF TOPMAN EXPORTS VS. ITO (SUPRA) HAS BEEN UPHELD BY THE HON'BLE SUPREME COURT. THEREFORE, THE ISSUE REM AINS TO BE EXAMINED WHETHER THE AO HAS COMPUTED THE DEDUCTION AS PER THE DECISI ON OF THE SPECIAL BENCH RENDERED IN THE CASE OF TOPMAN EXPORTS(SUPRA). THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE IS THAT THE COMPUTATION OF 'PROFIT OF THE BUSINESS' AS PER EXPLANATION(BAA) OF SECTION 80HHC , WHETHER MADE ON THE BASIS OF THE JUDGMENT OF TOPMAN EXPORTS OR ON THE BASIS OF KALPATARU COLO URS AND CHEMICALS, WILL NOT MAKE ANY DIFFERENCE BECAUSE WHATEVER AMOUNT IS REDU CED FROM THE 'PROFIT OF THE BUSINESS' AS PER EXPLANATION (BAA), THE SAME WILL BE INCREASED BY THE IDENTICAL AMOUNT AS PER VARIOUS PROVISOS OF SECTION 80HHC(3) OF THE ACT. IN OTHER WORDS, THE OVERALL COMPUTATION OF CLAIM OF DEDUCTION U/S.8 0HHC WILL NOT MATERIALLY BE DIFFERENT UNDER BOTH THE JUDGMENTS. THUS, THE AMOUN T OF DEDUCTION OF RS.38,08,898/- U/S.80HHC AS SHOWN WILL REMAIN UNCHA NGED. THE AO DID NOT ACCEPT THE CONTENTION ON THE BASIS THAT THE EXPORT TURNOVER OF THE ASSESSEE IS MORE THAN RS.10 CRORES. FURTHER, IT WAS NOTICED THA T PROFITS DERIVED FROM EXPORT IN RESPECT OF GOODS OR MERCHANDISE MANUFACTURED ARE AT LOSS. PROFITS DERIVED FROM EXPORT IN RESPECT OF TRADING GOODS IS AT RS.12,13,0 54/-. THUS, THE ASSESSEE- COMPANY HAS A NET LOSS DERIVED FROM EXPORT OF GOODS OR MERCHANDISE MANUFACTURED AND TRADING GOODS AT RS.15,55,222/-. T HE CONTENTION OF THE ASSESSEE IS THAT THE AMENDMENT WAS MADE IN THE PROV ISIONS OF SECTION 80HHC OF THE ACT AS BROUGHT W.E.F. 01/04/1997, BY THE TAXATION LAWS (AMENDMENT) ACT , 2005 WOULD NOT BE APPLICABLE SINCE THE ASSESSMENT I S AY 2003-04. IN SUPPORT OF ITA NO. 2166 /AHD/2011 . A.Y. 2004-05 14 THIS CONTENTION, THE LD.COUNSEL FOR THE ASSESSEE HA S RELIED UPON THE JUDGEMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT RENDERED IN T HE CASE OF AVANI EXPORTS VS. CIT REPORTED AT REPORTED AT 348 ITR 391(GUJ.). THE HON' BLE SUPREME COURT IN THE CASE OF CIT VS. AVANI EXPORTS REPORTED AT 58 TAXMANN.COM 100(SC) HAS CATEGORICALLY RULED THAT HAVING SEEN THE TWIN CONDITIONS AND SINC E 80HHC BENEFIT IS NOT AVAILABLE AFTER 1.4.05, THE CASES OF EXPORTERS HAVI NG A TURNOVER BELOW AND THOSE ABOVE 10 CRORES SHOULD BE TREATED SIMILARLY. 4.2. IN VIEW OF THE ABOVE JUDGEMENT OF HON'BLE SUPR EME COURT, WE ARE OF THE CONSIDERED VIEW THAT THE LD.CIT(A) WAS NOT JUSTIFIE D IN CONFIRMING THE ACTION OF THE AO. THEREFORE, RESPECTFULLY FOLLOWING THE JUDGEMENT OF HON'BLE SUPREME COURT RENDERED IN THE CASE OF CIT VS. AVANI EXPORTS, WE H EREBY DIRECT THE AO TO ALLOW THE DEDUCTION U/S.80HHC OF THE ACT. THUS, GROUND NO S.1 TO 5 OF ASSESSEE'S APPEAL ARE ALLOWED. 21. RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDIN ATE BENCH (SUPRA), WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGA INST THE REVENUE. GROUND NO. 4 IS ALLOWED. 22. GROUND NO. 5 APPEARS TO BE ALTERNATE CONTENTION QUA GROUND NO. 4 (SUPRA), SINCE; WE HAVE DECIDED THE ISSUES QUA GROUND NO. 4 IN FAVOUR OF THE ASSESSEE. GROUND NO. 5 BECOMES INFRUCTUOUS. 23. GROUND NO. 6 RELATES TO THE REDUCTION OF GROSS INTE REST INCOME AS AGAINST NET INTEREST FOR COMPUTING DEDUCTION U/S. 80HHC OF THE ACT. 24. THIS ISSUE IS NO MORE RES INTEGRA AS THE SAME HAS B EEN DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE HONBLE SUPREME COURT IN THE ITA NO. 2166 /AHD/2011 . A.Y. 2004-05 15 CASE OF ACG ASSOCIATED CAPSULES PVT. LTD. IN 343 IT R 89. THE RELEVANT PART READS AS UNDER:- FOR THE PURPOSE OF SECTION 80HHC OF THE INCOME-TAX ACT, 1961, IT IS NOT THE ENTIRE AMOUNT RECEIVED BY THE ASSESSEE ON SALE OF DEPB CRE DIT, BUT THE SALE VALUE LESS THE FACE VALUE OF THE DEPB THAT WILL REPRESENT PROF IT ON TRANSFER OF DEPB CREDIT BY THE ASSESSEE. TOPMAN EXPORTS V. CIT [2012] 342 ITR 49 (SC) FOLLOW ED. UNDER CLAUSE (1) OF EXPLANATION (BAA) TO SECTION 80 HHC OF THE ACT, NINETY PER CENT. OF ANY RECEIPTS BY WAY OF BROKERAGE, COMMISSI ON, INTEREST, RENT, CHARGES OR ANY OTHER RECEIPT OF A SIMILAR NATURE INCLUDED IN A NY SUCH PROFITS ARE TO BE DEDUCTED FROM THE PROFITS OF THE BUSINESS AS COMPUT ED UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. THE EXPRESSIO N INCLUDED ANY SUCH PROFITS WOULD MEAN ONLY SUCH RECEIPTS BY WAY OF BROKERAGE, COMMISSION, INTEREST, RENT, CHARGES OR ANY OTHER RECEIPT WHICH ARE INCLUDED IN THE PROFITS OF THE BUSINESS AS COMPUTED UNDER THE HEAD PROFITS AND GAINS OF BUSIN ESS OR PROFESSION. THE QUANTUM OF THE RECEIPTS BY WAY OF BROKERAGE, COMMIS SION, INTEREST, RENT, CHARGES OR ANY OTHER RECEIPT OF A SIMILAR NATURE IS ALLOWED AS EXPENSES UNDER SECTIONS 30 TO 44D OF THE ACT AND IS NOT INCLUDED IN THE PROFIT S OF BUSINESS AS COMPUTED UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSIO N NINETY PER CENT. OF SUCH QUANTUM OF RECEIPTS CANNOT BE REDUCED UNDER CLAUSE (1)OF EXPLANATION (BAA) FROM THE PROFITS OF THE BUSINESS. IN OTHER WORDS, ONLY N INETY PER CENT. OF THE NET AMOUNT OF ANY RECEIPT OF THE NATURE MENTIONED IN CL AUSE (1) WHICH IS ACTUALLY INCLUDED IN THE PROFITS OF THE ASSESSEE IS TO BE DE DUCTED FROM THE PROFITS OF THE ASSESSEE FOR DETERMINING PROFITS OF THE BUSINESS OF THE ASSESSEE UNDER EXPLANATION (BAA) TO SECTION 80HHC. ITA NO. 2166 /AHD/2011 . A.Y. 2004-05 16 25. RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT (SUPRA), WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. GROUND NO. 6 IS ALLOWED. 26. GROUND NO. 7 RELATES TO THE ADDITION OF ACCRUED BON US UNDER KEYMEN INSURANCE POLICY. 27. ON PERUSAL OF THE DETAILS FURNISHED BY THE ASSESSEE , THE A.O. FOUND THAT THE ASSESSEE HAS SUBSCRIBED TO KEYMEN INSURANCE SCHEME OF LIC AND IS PAYING ANNUAL PREMIUM ON THE SAME. THE A.O. NOTICED THAT T HE ASSESSEE HAS NOT SHOWN THE BONUS ACCRUED UNDER THE SCHEME. DRAWING S UPPORT FROM THE PROVISIONS OF SECTION 28(VI) OF THE ACT, THE A.O. W AS OF THE FIRM BELIEF THAT BONUS OF SUCH POLICY WILL BE TAXABLE AS PROFIT AND GAINS OF BUSINESS. THE A.O. ACCORDINGLY MADE AN ADDITION OF RS. 5,62,500/-. 28. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. 29. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE COULD N OT BRING ANY JUDICIAL DECISION IN FAVOUR OF THE ASSESSEE NOR COULD POINT OUT ANY FALLACY/ERROR IN THE FACTUAL FINDINGS OF THE A.O. 30. CONSIDERING THE BONUS ACCRUED ON THE KEYMEN INSURAN CE POLICY IN THE LIGHT OF THE PROVISIONS OF SECTION 28(VI) OF THE ACT, WE DO NOT FIND ANY ERROR OR INFIRMITY IN THE FINDINGS OF THE LD. CIT(A). GROUND NO. 7 IS ACCORDINGLY DISMISSED. ITA NO. 2166 /AHD/2011 . A.Y. 2004-05 17 31. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 07- 02- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 07/02/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD