PRASHANTH PROJECTS LTD., NAVI MUMBAI V. INCOME TAX OFFICER RANGE 10(3)(2), MUMBAI

ITA 2631/MUM/2009

• Counselvise Citation: 263119914 RSA 2009
• Duration Of Justice: 2 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 09-05-2011
• Assessment Year: 1999-2000
• Appeal Filed On: 24-04-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MALATI SRIDHARAN
• Assessee Lawyers: DHARMENDRA M SHAH
• Keywords: Reopening of assessment; Tangible material; Difference of opinion; Assessment record; Capital receipt; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 147; 148; 43B; 143(3); 142(1); 80HHC

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. K.AGARWAL (JM) AND SHRI RAJENDRA SI NGH(AM) ITA NO.2631/M/2009 ASSESSMENT YEAR 1999-2000 ITA NO.1361/M/2009 ASSESSMENT YEAR 2003-04 ITA NO.2632/M/2009 ASSESSMENT YEAR 2004-05 PRASHANTH PROJECTS LTD. THE INCOME-TAX OFFICER 406-408, HERMES ATRIUM RANGE 10(3)(2), AAYAKAR B HAVAN PLOT NO.57, SECTOR II, CBD BELAPUR M.K. ROAD, MUM BAI 400 020. NAVI MUMBAI 614 PAN : AABCP 2387 F APPELLANT RESPONDENT ASSESSEE BY : SHRI DHARMENDRA M.SHAH REVENUE BY : SMT. MALATI SRIDHARAN ORDER PER RAJENDRA SINGH (AM) THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS DATED 12.2.2009, 1.1.2009 AND 12.2.2009 OF CIT(A) F OR THE ASSESSMENT YEARS 1999-2000, 2003-04 AND 2004-05 RESPECTIVELY. AS THE SE APPEALS INVOLVE SOME COMMON ISSUES, AND WERE HEARD TOGETHER, THESE ARE B EING DISPOSED OFF BY A SINGLE CONSOLIDATED ORDER FOR THE SAKE OF CONVENIEN CE. 1.1 WE FIND THAT THERE HAS BEEN A DELAY OF TWO DAYS IN FILING THE APPEAL BY THE ASSESSEE FOR WHICH THE ASSESSEE HAS FILED CONDO NATION APPLICATION ALONG 2 WITH AFFIDAVIT. THE DELAY HAS BEEN EXPLAINED ON THE GROUND THAT THE MANAGING DIRECTOR WHO WAS MANAGING THE TAX AFFAIRS WAS NOT I N TOWN AT THE RELEVANT POINT OF TIME. WE AGREE THAT THERE WAS A REASONAB LE CAUSE FOR DELAY IN FILING THE APPEAL AND ACCORDINGLY WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR ADJUDICATION. 2. WE FIRST TAKE UP THE APPEAL OF THE ASSESSEE IN I TA NO.2631/M/2009 FOR A.Y.1999-2000 . THE DISPUTE RAISED IN THIS APPEAL IS REGARDING AL LOWABILITY OF DEDUCTION UNDER SECTION 80HHC IN CASE OF THE ASSESS EE AND AN ALTERNATE GROUND FOR DEDUCTION UNDER SECTION 80HHB HAD ALSO B EEN RAISED. IN ADDITION, THE ASSESSEE HAS ALSO FILED AN ADDITIONAL GROUND ON 9.8.2010 CHALLENGING THE LEGAL VALIDITY OF REASSESSMENT PROCEEDINGS INITIATE D BY THE AO VIDE NOTICE DATED 3.3.2006 UNDER SECTION 148. THIS BEING A LEGAL GROU ND WHICH COULD BE ADJUDICATED ON THE BASIS OF MATERIAL AVAILABLE ON R ECORD, WAS ADMITTED BY THE TRIBUNAL. 2.1 WE FIRST TAKE UP THE ISSUE OF VALIDITY OF RE-AS SESSMENT PROCEEDINGS, AS THIS IS A LEGAL GROUND HAVING BEARING ON THE VALIDI TY OF ASSESSMENT ITSELF. THE FACTS CONCERNING THE REOPENING OF THE ASSESSMENT UN DER SECTION 147 OF THE INCOME-TAX ACT ARE THAT THE ASSESSEE FOR THE ASSESS MENT YEAR 1999-2000 HAD DECLARED TOTAL INCOME OF RS.89,98,120/- AFTER CLAIM ING DEDUCTION OF RS.2,22,81,996/- UNDER SECTION 80HHC. THE RETURN WA S PROCESSED UNDER SECTION 143(1) ON 5.12.2000. SUBSEQUENTLY, THE AO N OTED FROM THE RECORDS THAT THE ASSESSEE WAS NOT ENGAGED IN THE MANUFACTUR ING OF ANY COMMODITY/ PRODUCT. THE ASSESSEE COMPANY WAS ONLY UNDERTAKING JOBS FOR CONSTRUCTION OF TANKS/ VESSELS FOR STORAGE OF CHEMICALS, ON LABOUR BASIS AND/OR ON TURNKEY BASIS. THE AO ALSO NOTED THAT NEITHER THE DIRECTORS NOR THE AUDITORS HAD STATED 3 THAT THE ASSESSEE WAS HAVING MANUFACTURING OR TRADI NG EXPORTS. THE AO THEREFORE FORMED HIS BELIEF THAT THE ASSESSEE WAS N OT ELIGIBLE FOR CLAIM OF DEDUCTION UNDER SECTION 80HHC AMOUNTING TO RS.2,22, 81,996/- AND AFTER RECORDING THE REASONS TO THE ABOVE EFFECT, THE AO R EOPENED THE ASSESSMENT BY ISSUING NOTICE UNDER SECTION 148 DATED 3.3.2006. SU BSEQUENTLY, VIDE LETTER DATED 16.6.2006, A COPY OF WHICH HAS BEEN PLACED ON RECORD, THE AO ASKED THE ASSESSEE TO MAKE COMPLIANCE TO THE NOTICES UNDER SE CTION 142(1) AND 143(2). IN THE SAID LETTER THE AO ALSO MENTIONED THE FOLLOW ING : 2. ON PERUSAL OF THE AUDIT REPORT FILED IN FORM NO .3CD, IT IS MENTIONED THAT THE ASSESSEE COMPANY IS NOT ENGAGED IN MANUFACTURING OF ANY COMMODITY/ PRODUCTS. THE COMPANY IS UNDERTAK ING JOBS FOR CONSTRUCTION OF TANKS/ VESSELS FOR STORAGE OF CHEMI CALS, FUELS ETC. ON LABOUR BASIS AND/OR TURNKEY BASIS (APPEARING AT SR. NO.28(B)). NEITHER THE DIRECTORS NOR THE AUDITORS HAVE REPORTED THAT T HE ASSESSEE HAS ANY MANUFACTURING EXPORT OR TRADING EXPORT. THERE IS NO SPECIFIC CLAIM MADE IN RESPECT OF ANY MANUFACTURING EXPORT. IN VIEW OF THESE FACTS, THE ASSESSEE COMPANY WAS NOT ELIGIBLE FOR CLAIM OF DEDU CTION AMOUNTING TO RS.2,22,81,996/- MADE UNDER SECTION 80HHC OF THE I. T. ACT. 3. FURTHER IN VIEW OF THE EXPLANATION 2(C)(1) TO TH E SECTION 147 OF THE I.T.ACT, 1961, I HAVE REASON TO BELIEVE THAT THE IN COME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE A.Y.1999-2000 TO THE SAID EXTENT. 2.2 THE AO THEREAFTER HEARD THE ASSESSEE AND AFTER NECESSARY EXAMINATION HELD THAT THE ASSESSEE WAS NOT ENTITLED FOR DEDUCTI ON UNDER SECTION 80HHC. ACCORDINGLY HE DISALLOWED THE CLAIM. THE ASSESSEE D ID NOT RAISE ANY GROUND 4 REGARDING REOPENING OF ASSESSMENT BEFORE CIT(A). HO WEVER AS MENTIONED EARLIER AN ADDITIONAL GROUND HAS BEEN RAISED BEFORE THE TRIBUNAL QUESTIONING THE LEGAL VALIDITY OF REASSESSMENT PROCEEDINGS. THE ASS ESSEE VIDE LETTER DATED 25.10.2010 ADDRESSED TO THE AO A COPY OF WHICH IS P LACED ON RECORD HAD ALSO REQUESTED TO SUPPLY THE REASONS RECORDED FOR REOPEN ING THE ASSESSMENT. LATER, AT THE INSTANCE OF THE TRIBUNAL, THE DEPARTMENT PRO DUCED THE RELEVANT RECORDS FROM WHICH THE TRIBUNAL NOTED THAT THE REASONS HAD BEEN DULY RECORDED ON 3.3.2006. IT IS ALSO NOTED THAT THE REASONS RECORDE D ARE THE SAME AS MENTIONED BY THE AO IN THE ASSESSMENT ORDER AND ALSO CONVEYED TO THE ASSESSEE EARLIER VIDE LETTER DATED 16.6.2006. WE ARE THEREFORE SATIS FIED THAT THE ASSESSMENT HAD BEEN REOPENED BY RECORDING REASONS AND THE APPREHEN SION OF THE ASSESSEE THAT REASONS MAY NOT HAVE BEEN RECORDED IS NOT FOUND TO BE CORRECT. 2.3 THE LEARNED AR FOR THE ASSESSEE HOWEVER ARGUED THAT IT WAS NOT CORRECT TO SAY THAT THE ASSESSEE WAS NOT A MANUFACTURER AND EXPORTER. HE REFERRED TO COL.8(A) OF THE AUDIT REPORT IN FORM 3CD FOR A.Y.19 99-2000 IN WHICH THE NATURE OF BUSINESS WAS MENTIONED WAS A MANUFACTURER OF CHE MICAL STORAGE TANK. HE ALSO REFERRED TO THE PROFIT AND LOSS ACCOUNT PLACED AT PAGE 17 OF THE PAPER BOOK IN WHICH THE ASSESSEE HAD SHOWN INCOME FROM JOB WOR K/ EXPORTS DETAILS OF WHICH HAVE BEEN GIVEN IN SCHEDULE -7 PLACED AT PAGE 23 OF THE PAPER BOOK. HE ALSO REFERRED TO NOTE NO.10 OF THE AUDITORS PLACED AT PAGE 25 OF THE PAPER BOOK IN WHICH QUANTITATIVE DETAILS OF RAW MATERIAL CONSU MED SUCH AS MS STEEL ETC WERE GIVEN. REFERENCE WAS ALSO MADE TO THE AUDIT RE PORT IN THE FORM NO.10CCAC PLACED AT PAGE 28 OF THE PAPER BOOK IN WH ICH THE AUDITORS HAD COMPUTED THE DEDUCTION ALLOWABLE UNDER SECTION 80HH C AT RS.2,22,81,966/-. IT WAS ACCORDINGLY ARGUED THAT THERE WAS NO MATERIAL F OR THE AO TO FORM BELIEF THAT THE ASSESSEE WAS NOT A MANUFACTURER AND EXPORT ER AND THAT IT WAS NOT 5 ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC. IT WAS THUS ARGUED THAT THE REOPENING WAS NOT VALID. THE LEARNED AR ALSO ARGUED THAT THE REOPENING OF THE ASSESSMENT WAS ALSO INVALID ON THE GROUND THAT THE SAME WAS BASED ON CHANGE OF OPINION WHICH WAS NOT PERMITTED. IT WAS SUBMITTE D THAT THE ASSESSMENT HAD BEEN REOPENED ON THE BASIS OF THE SAME MATERIAL WHI CH WERE AVAILABLE IN THE RETURN AND THEREFORE REOPENING WAS INVALID AS IT WA S BASED ON CHANGE OF OPINION. FOR THIS PROPOSITION, THE LEARNED AR PLACE D RELIANCE ON THE FOLLOWING JUDGMENTS IN SUPPORT OF THE PLEA : (I) 324 ITR 154(MUM) IN CASE OF PRASHANT S. JOSHI AND A NR. VS ITO (II) 329 ITR 110 (DELHI) IN CASE OF SARTHAK SECURITIES C O. PVT. LTD. VS ITO (III) 331 ITR 435 (MADRAS) IN CASE OF BAYER SHOES (INDIA) PVT. LTD. (IV) 320 ITR 561 (SC) IN CASE OF KELVINATOR OF INDIA LTD . (V) 188 TAXMAN 123 (MUM) IN CASE OF BHAVESH DEVELOPERS VS AO. (VI) 192 TAXMAN 137 (MUM) IN CASE OF 3IINFORTEK LTD. VS ACIT. 2.4 THE LEARNED DR APPEARING FOR THE REVENUE ON THE OTHER HAND ARGUED THAT THE ASSESSEE WAS NOT AN EXPORTER OF GOODS OR M ERCHANDISE TO BE ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC. HE REFERRED TO C LAUSE 28(B) OF THE AUDIT REPORT IN WHICH THE AUDITORS HAD REPORTED AS UNDER : THE COMPANY IS NOT ENGAGED IN MANUFACTURE OF ANY COMMODITY/ PRODUCTS. THE CO. IS UNDERTAKING JOBS FO R CONSTRUCTION OF TANKS/ VESSELS FOR STORAGE OF CHEMI CALS, FUELS ETC. ON LABOUR BASIS AND/OR TURNKEY BASIS. IN VIEW OF THIS, ONLY THE RELEVENT INFORMATION IS GIVEN. 6 2.5 IT WAS THUS POINTED OUT BY THE LEARNED DR THAT THE ASSESSEE WAS NOT EXPORTER OF GOODS OR MERCHANDISE. THE ASSESSEE WAS ONLY UNDERTAKING JOBS FOR CONSTRUCTION OF TANK/ VESSELS FOR STORAGE OF CHEMIC ALS, FUELS ETC. ON LABOUR BASIS/OR ON TURNKEY BASIS WHICH WAS DULY MENTIONED IN THE AUDIT REPORT. THERE WAS THEREFORE REASON FOR THE AO TO BELIEVE THAT THE ASSESSEE BEING NON EXPORTER OF GOODS/ MERCHANDISE WAS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC. IT WAS ALSO ARGUED THAT NO ASSESSMENT IN THI S CASE HAD BEEN MADE UNDER SECTION 143(3) AND THE RETURN HAD ONLY BEEN P ROCESSED UNDER SECTION 143(1) AND INTIMATION HAD BEEN ISSUED. THE REOPENI NG OF THE ASSESSMENT BASED ON MATERIAL AVAILABLE IN THE RETURN COULD NOT THEREFORE BE SAID TO BE DUE TO CHANGE OF OPINION. THE LEARNED DR REFERRED TO T HE JUDGMENT OF HONBLE SUPREME COURT IN CASE OF RAJESH JHAVERI STOCK BROKE RS (P) LTD. (291 ITR 500) IN WHICH IT WAS HELD THAT INTIMATION IS NOT AN ASSE SSMENT AND THAT THE REOPENING COULD BE MADE EVEN IN CASES WHERE ONLY IN TIMATION HAD BEEN ISSUED. IT WAS FURTHER SUBMITTED THAT THE HONBLE SUPREME C OURT IN THE SAID CASE HAD ALSO HELD THAT REOPENING OF THE ASSESSMENT IN CASE OF INTIMATION DID NOT INVOLVE ANY CHANGE OF OPINION AS AT THE TIME OF ISSUE OF IN TIMATION UNDER SECTION 143(1), THE AO WAS NOT EMPOWERED TO TAKE ANY VIEW O F ANY ISSUE RELATING TO THE RETURN OF INCOME. HE WAS ONLY REQUIRED TO ISSUE INTIMATION ON THE BASIS OF INCOME DECLARED IN THE RETURN. IT WAS THUS ARGUED T HAT THE REOPENING OF ASSESSMENT WAS LEGALLY VALID. 2.6 WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING LEGAL VALIDITY OF REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE I.T.ACT. THE RETURN FILED BY THE ASSESSEE FOR THE RELEVANT YEAR HAD BEEN PROCESSED UNDER SECTION 143( 1) AND INTIMATION HAD 7 BEEN ISSUED UNDER THE SAID SECTION. ADMITTEDLY THER E WAS NO ASSESSMENT MADE UNDER SECTION 143(3) OF THE I.T.ACT. THE AO SUBSEQU ENTLY NOTED FROM THE AUDIT REPORT THAT THE ASSESSEE COMPANY WAS ONLY UNDERTAKI NG JOBS FOR CONSTRUCTION OF TANKS/ VESSELS FOR STORAGE OF CHEMICALS, FUELS ETC ON LABOUR BASIS AND /OR ON TURNKEY BASIS IN TANZANIA. THE ASSESSEE WAS THUS NO T IN ANY MANUFACTURING OR TRADING EXPORT. AO THEREFORE FORMED THE BELIEF THAT DEDUCTION UNDER SECTION 80HHC CLAIMED AND ALLOWED UNDER SECTION 143(1) WAS NOT ALLOWABLE TO THE ASSESSEE AND INCOME CHARGEABLE TO TAX HAD THUS ESCA PED ASSESSMENT AND ACCORDINGLY ISSUED NOTICE UNDER SECTION 148 DATED 3 .3.2006 AFTER RECRODING REASONS TO THE ABOVE EFFECT. THE AO HAD ALSO CONVEY ED THE REASONS FOR FORMATION OF BELIEF REGARDING ESCAPEMENT OF INCOME VIDE LETTER DATED 16.6.2006 ADDRESSED TO THE ASSESSEE. THE REASONS FOR REOPENIN G THE ASSESSMENT HAVE ALSO BEEN MENTIONED IN THE ASSESSMENT ORDER. AT TH E TIME OF HEARING OF THE APPEAL, ASSESSMENT RECORDS WERE ALSO OBTAINED PERUS AL OF WHICH SHOWED THAT THE REASONS FOR REOPENING AS MENTIONED IN THE ASSES SMENT ORDER AND IN THE LETTER DATED 16.6.2006 WERE DULY RECORDED BY THE AO AT THE TIME OF ISSUE OF NOTICE UNDER SECTION 148. THUS THE AO HAD FOLLOWED THE PROCEDURE LAID DOWN FOR REOPENING OF ASSESSMENT. NOW ONLY ISSUE REQUIRED TO BE ADDRESSED IS WHETHER THERE WAS TANGIBLE MATERIAL AVAILABLE BEFORE THE AO FOR FORMATION OF BELIEF FOR ESCAPEMENT OF INCOME AND WHETHER SUCH FORMATION OF BELIEF WAS BASED ON ANY CHANGE OF OPINION. IT IS A SETTLED LEGAL POSITION T HAT THERE MUST BE MATERIAL AVAILABLE BEFORE THE AO HAVING NEXUS WITH THE FORMA TION OF BELIEF FOR ESCAPEMENT OF INCOME. THOUGH THE SUFFICIENCY OF MAT ERIAL CANNOT BE QUESTIONED, THERE MUST BE SOME RELEVANT MATERIAL FO R FORMATION OF REASONABLE BELIEF. FURTHER, AS HELD BY HONBLE SUPREME COURT I N CASE OF KELIVANTOR OF INDIA LTD. (320 ITR 561) THAT EVEN AFTER AMENDMENT OF PRO VISIONS OF SECTION 147 8 FROM 1.4.1989, REOPENING OF ASSESSMENT UNDER SECTIO N 147 BASED ON CHANGE OF OPINION WAS NOT PERMITTED. 2.7 IN THIS CASE THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80HHC WHICH IS ALLOWABLE ONLY IN CASE OF EXPORT OF GOODS OR MERCHANDISE. HOWEVER THE AUDITORS IN CLAUSE 28(B) OF THE AUDIT REPORT HAD CL EARLY MENTIONED THAT THE ASSESSEE WAS NOT ENGAGED IN MANUFACTURE OF ANY COMM ODITY/ PRODUCT. THE AUDITORS ALSO MENTIONED THAT THE ASSESSEE COMPANY W AS UNDERTAKING JOBS FOR CONSTRUCTION OF TANK/ VESSELS FOR STORAGE OF CHEMIC ALS, FUELS ETC. ON LABOUR BASIS AND/ OR TURNKEY BASIS. SINCE THE JOBS WAS UNDERTAKE N IN THE FOREIGN TERRITORY, THE ASSESSEE WAS TRANSPORTING CERTAIN EQUIPMENTS AN D MATERIALS TO THE FOREIGN COUNTRY FOR UTILIZATION IN THE EXECUTION OF THE PRO JECT. THE FACT THAT THE ASSESSEE WAS EXECUTING A TURN KEY PROJECT IN A FOREIGN COUNT RY IS NOT DISPUTED. IT IS A SETTLED LEGAL POSITION THAT ENTRIES IN THE BOOKS OF ACCOUNT ARE NOT CONCLUSIVE ABOUT THE NATURE OF INCOME EARNED BY THE ASSESSEE W HICH HAS TO BE UNDERSTOOD AFTER CAREFUL ANALYSIS OF THE NATURE OF ACTIVITIES UNDERTAKEN. THEREFORE MERELY BECAUSE THE ASSESSEE SHOWED THE INCOME AS EXPORT IN COME IN THE ACCOUNTS CANNOT BE THE BASIS TO CONCLUDE THAT THE ASSESSEE W AS EXPORTER OF GOODS OR MERCHANDISE. CONSIDERING THE NATURE OF ACTIVITIES M ENTIONED EARLIER, IN OUR VIEW IT WAS QUITE REASONABLE TO FORM A BELIEF THAT THE A SSESSEE WAS NOT EXPORTER OF GOODS OR MERCHANDISE AND THEREFORE NOT ENTITLED FOR DEDUCTION UNDER SECTION 80HHC. THERE WAS THUS TANGIBLE MATERIAL FOR FORMATI ON OF BELIEF FOR ESCAPEMENT OF INCOME AND THEREFORE IT COULD NOT BE SAID THAT T HE REOPENING WAS NOT BASED ON ANY RELEVANT MATERIAL. THERE IS NO REQUIREMENT T HAT THE MATERIAL SHOULD CONCLUSIVELY ESTABLISH THAT THE INCOME HAS ESCAPED ASSESSMENT. 2.8 AS REGARDS THE CHANGE OF OPINION, WE NOTE THAT IN THIS CASE NO ASSESSMENT HAD BEEN MADE UNDER SECTION 143(3). THE RETURN FILED BY THE 9 ASSESSEE HAD ONLY PROCESSED UNDER SECTION 143(1) AN D INTIMATION HAD BEEN ISSUED. HONBLE SUPREME COURT IN CASE OF RAJESH JHA VERI STOCK BROKERS PVT. LTD. (SUPRA) HAVE HELD THAT INTIMATION UNDER SECTIO N 143(1) IS NOT AN ASSESSMENT AS AO WHILE ISSUING INTIMATION COULD COR RECT ONLY APPARENT MISTAKES IN THE RETURN AND COULD NOT ADJUDICATE UPON ANY DEB ATABLE ISSUE. SINCE WHILE ISSUING INTIMATION UNDER SECTION 143(1) THE AO WAS NOT EMPOWERED TO TAKE ANY VIEW ON ANY MATTER RELATING TO THE RETURN OF INCOME , REOPENING THE ASSESSMENT BASED ON THE MATERIAL IN THE RETURN COULD NOT BE SA ID TO BE BASED ON CHANGE OF OPINION. THE HONBLE SUPREME COURT THEREFORE HELD T HAT EVEN IF NO ASSESSMENT HAD BEEN MADE AND ONLY INTIMATION HAD BEEN ISSUED, THE ASSESSMENT COULD BE REOPENED BASED ON THE MATERIAL IN THE RETURN WITHOU T INVOLVING ANY CHANGE OF OPINION. IN THAT CASE IN THE RETURN OF INCOME, THE ASSESSEE HAD CLAIMED BAD DEBT OF RS.1285.72 LACS. THE RETURN OF INCOME HAD B EEN PROCESSED AND INTIMATION UNDER SECTION 143(1) HAD BEEN ISSUED. SU BSEQUENTLY, BASED ON MATERIAL AVAILABLE ON RECORD, AUDIT POINTED OUT THA T CONDITIONS OF SECTION 36(1)(VII) R.W.S. 36(2) WERE NOT FULFILLED AND THER EFORE THE CLAIM OF BAD DEBT WAS NOT ALLOWABLE. THE AO THEREAFTER REOPENED THE A SSESSMENT AFTER FORMING BELIEF THAT INCOME CHARGEABLE TO TAX HAD ESCAPED AS SESSMENT. THE ISSUES RAISED BEFORE THE HONBLE SUPREME COURT WERE AS TO WHETHER THE ASSESSMENT COULD BE REOPENED WHEN THERE HAD BEEN NO ASSESSMENT AND ONLY INTIMATION HAD BEEN ISSUED AND WHETHER REOPENING BASED ON THE SAME MATERIAL COULD BE SAID TO BE BASED ON CHANGE OF OPINION. HONBLE SUPR EME COURT AS POINTED OUT EARLIER HELD THAT THERE WAS NO CHANGE OF OPINION AS THE AO WAS NOT EMPOWERED TO TAKE ANY VIEW AT THE TIME OF ISSUE OF INTIMATION UNDER SECTION 143(1). IT WAS ALSO HELD THAT REOPENING COULD BE MADE EVEN WHEN IN TIMATION HAD BEEN ISSUED. IN THE PRESENT CASE ALSO, RETURN HAD BEEN PROCESSED UNDER SECTION 143(1) IN WHICH AO HAD NO DISCRETIONARY POWER TO MAKE ANY CHA NGES IN THE INCOME 10 RETURNED AND WAS ONLY REQUIRED TO ISSUE INTIMATION ON THE BASIS OF INCOME RETURNED BY THE ASSESSEE. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE MENTIONED EARLIER AND THE JUDGMENT OF HONBLE SUPRE ME COURT IN CASE OF RAJESH JHAVERI STOCK BROKERS PVT. LTD. (SUPRA) WE H OLD THAT THE REOPENING OF ASSESSMENT IN THIS CASE WAS BASED ON RELEVANT AND T ANGIBLE MATERIAL AND THERE WAS NO CHANGE OF OPINION INVOLVED. 2.9 THE LEARNED AR FOR THE ASSESSEE HAS PLACED RELI ANCE ON SEVERAL JUDGMENTS WHICH IN OUR VIEW ARE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN CASE OF CIT VS KELVINATOR O F INDIA LTD. (320 ITR 561) WHICH HAD BEEN RELIED UPON BY THE LEARNED AR THE IS SUE WAS WHETHER THE CONCEPT OF CHANGE OF OPINION STOOD OBLITERATED AFT ER AMENDMENT TO SECTION 147 W.E.F. 1.4.1989. IT WAS HELD THAT THOUGH THE AO AFT ER THE AMENDMENT HAD WIDER POWER TO REOPEN THE ASSESSMENT BUT HE HAD NO POWER TO REOPEN THE ASSESSMENT ON MERE CHANGE OF OPINION EVEN AFTER THE AMENDMENT. THE HONBLE SUPREME COURT ALSO HELD THAT THE AO WAS EMPOWERED T O REOPEN THE ASSESSMENT PROVIDED THERE WAS TANGIBLE MATERIAL TO COME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT . THERE WAS NO ISSUE BEFORE THE HONBLE SUPREME COURT AS TO WHETHER THE REOPENING OF ASSESSMENT ON THE BASIS OF MATERIAL IN THE RETURN IN CASES WHE RE ONLY INTIMATION HAD BEEN ISSUED COULD BE CONSIDERED AS BASED ON CHANGE OF OP INION. SUCH ISSUE AS WE HAVE POINTED OUT EARLIER HAD BEEN DECIDED BY THE AP EX COURT IN CASE OF RAJESH JHAVERI STOCK BROKERS PVT. LTD. (SUPRA). AS REGARDS THE MATERIAL FOR FORMATION OF BELIEF, WE HAVE ALREADY HELD EARLIER THAT THERE WAS RELEVANT AND TANGIBLE MATERIAL BEFORE THE AO FOR FORMING THE BELIEF THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. 11 2.10 THE CASE OF PRASHANT S.JOSHI AND ANR VS ITO ( 324 ITR 154) HAS ALSO BEEN REFERRED TO BY THE LEARNED AR WHO HAS POINTED OUT THAT IN THAT CASE ALSO ONLY INTIMATION HAD BEEN ISSUED AND THE HONBLE HIG H COURT OF MUMBAI AFTER REFERRING TO THE JUDGMENT OF HONBLE SUPREME COURT IN CASE OF RAJESH JHAVERI STOCK BROKERS PVT. LTD. (SUPRA) HAD HELD THE REOPEN ING INVALID. WE HAVE CAREFULLY GONE THROUGH THE SAID JUDGMENT AND FIND T HAT THE SAME IS DISTINGUISHABLE. IN THAT CASE THE ASSESSEE HAD RECE IVED A SUM OF MONEY ON RETIREMENT FROM THE FIRM WHICH HAD BEEN DECLARED AS CAPITAL RECEIPT IN THE RETURN OF INCOME WHICH WAS PROCESSED AND INTIMATION WAS ISSUED UNDER SECTION 143(1). SUBSEQUENTLY, THE AO AFTER NOTING THAT THE SUM PAID TO THE ASSESSEE BY THE FIRM HAD BEEN CLAIMED AS A DEDUCTION IN CASE OF THE FIRM, FORMED A BELIEF THAT RECEIPT IN CASE OF THE ASSESSEE WAS TAXABLE AN D ACCORDINGLY REOPENED THE ASSESSMENT UNDER SECTION 147. THE ISSUE WAS LEGAL V ALIDITY OF REOPENING OF THE ASSESSMENT. THE REVENUE HAD RELIED ON THE JUDGMENT OF HONBLE SUPREME COURT IN CASE OF CIT VS RAJESH JHAVERI STOCK BROKERS PVT. LTD. (SUPRA) TO ARGUE THAT REOPENING COULD BE MADE EVEN WHEN NO ASSESSMENT HAD BEEN MADE AND ONLY INTIMATION HAS BEEN ISSUED AND THAT IT WAS NOT A CA SE OF CHANGE OF OPINION AS ONLY INTIMATION HAD BEEN ISSUED UNDER SECTION 143(1 ). THE HONBLE HIGH COURT OF MUMBAI IN THAT CASE HAD NOT HELD THAT THE REOPEN ING WAS INVALID ON THE GROUND THAT THERE WAS CHANGE OF OPINION. THE REOPEN ING WAS HELD INVALID BY THE HIGH COURT ON THE GROUND THAT THERE WAS NO MATERIAL BEFORE THE AO TO FORM A REASONABLE BELIEF THAT INCOME HAD ESCAPED ASSESSMEN T. MERELY BECAUSE THE PAYMENT BY THE FIRM HAD BEEN CLAIMED AS REVENUE EXP ENDITURE IN CASE OF THE FIRM IT COULD NOT AUTOMATICALLY LEAD TO CONCLUSION THAT THE PAYMENT RECEIVED BY THE ASSESSEE WAS A REVENUE RECEIPT. HONBLE HIGH CO URT OBSERVED THAT LEGAL VALIDITY OF THE REOPENING MUST BE DETERMINED WITH R EFERENCE TO THE REASONS RECORDED BY THE AO AND FROM THE REASONS RECORDED, NO PRUDENT PERSON COULD 12 HAVE FORMED THE OPINION THAT INCOME HAD ESCAPED ASS ESSMENT. HONBLE HIGH COURT FURTHER OBSERVED THAT EVEN IF PLEA OF THE REV ENUE THAT THE AMOUNT RECEIVED BY THE REVENUE WAS TAXABLE UNDER CLAUSE (V ) AND (VI) OF SECTION 28 AS DONE BY THE AO IN THE ASSESSMENT ORDER WAS CONSIDER ED, THERE WERE NO CASE MADE FOR TAXABILITY OF THE AMOUNT BECAUSE CLAUSE (I V) OF SECTION 28 DID NOT APPLY TO ANY BENEFIT RECEIVED IN MONETARY TERM AND CLAUSE (V) OF SECTION 28 REFERRED TO ANY INTEREST, SALARY, BONUS, COMMISSION OR REMUNERATION RECEIVED BY THE PARTNERS WHICH WAS NOT APPLICABLE IN CASE OF THE ASSESSEE. THUS THE NOTICE ISSUED BY THE AO UNDER SECTION 148 WAS SET A SIDE. THE PRESENT CASE IS DISTINGUISHABLE AS WE HAVE HELD EARLIER THAT THERE WAS TANGIBLE MATERIAL BEFORE THE AO FOR FORMATION OF BELIEF THAT THE ASSESSEE WA S NOT EXPORTER OF GOODS OR MERCHANDISE AND THUS NOT ELIGIBLE FOR DEDUCTION UND ER SECTION 80HHC AND INCOME HAD THEREFORE ESCAPED ASSESSMENT. 2.11 THE JUDGMENTS OF HONBLE HIGH COURT OF MUMBAI IN CASE OF BHAVESH DEVELOPERS VS AO (SUPRA) AND THE JUDGMENT IN CASE O F 3IINFOTECH LTD. VS ACIT (SUPRA) ARE ALSO DISTINGUISHABLE AS IN THOSE CASES ASSESSMENTS HAD ALREADY BEEN MADE UNDER SECTION 143(3) AND REOPENING HAD BE EN MADE AFTER A LAPSE OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEARS. IN TERMS OF THE PROVISO TO SECTION 147, IN CASE AN ASSESSMENT HAD A LREADY BEEN MADE UNDER SECTION 143(3), REOPENING OF ASSESSMENT AFTER A LAP SE OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEARS CAN BE MADE ON LY WHEN THERE IS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY AND F ULLY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. IN THESE CASES, HONBLE H IGH COURT NOTED THAT THE REVENUE HAD FAILED TO ESTABLISH THAT THERE WAS FAIL URE ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY ALL MATERIAL F ACTS NECESSARY FOR ASSESSMENT. IT WAS ACCORDINGLY HELD THAT THE REOPENING WAS BAD IN LAW. THE CASE IS NOT 13 APPLICABLE TO THE FACTS IN CASE OF THE ASSESSEE. SI MILAR WAS THE POSITION IN CASE OF CIT VS BAYER SHOES INDIA PVT. LTD. (SUPRA). IN T HAT CASE IN THE ASSESSMENT MADE UNDER SECTION 143(3)/ 147, THE DEDUCTION CLAIM ED UNDER SECTION 80HHC HAD BEEN REDUCED. THEREAFTER THE CASE WAS AGAIN REO PENED AFTER A LAPSE OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR AND DEDUCTION UNDER SECTION 80HHC WAS FULLY DISALLOWED FOLLOWING THE SUPREME CO URT JUDGMENT. IT WAS HELD THAT THE CASE COULD BE REOPENED AGAIN ONLY WHEN THE ASSESSEE HAD FAILED TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS WHICH W AS NOT SO IN THE PRESENT CASE. ACCORDINGLY THE REOPENING WAS HELD BAD IN LAW. THE LEARNED AR HAS ALSO ARGUED THAT SIMILAR ASSESSMENTS MADE IN A.Y.2000-01 AND 20 02-03 IN CASE OF THE ASSESSEE HAVE BEEN QUASHED BY THE HIGH COURT. WE HA VE GONE THROUGH THE SAID ORDERS AND FIND THAT IN A.Y.2000-01, THE ASSES SMENT HAS BEEN QUASHED ON THE GROUND THAT NO REASONS HAD BEEN RECORDED AND IN A.Y.2002-03, THE ASSESSMENT HAD BEEN QUASHED ON THE GROUND THAT THER E HAD ALREADY BEEN AN ASSESSMENT MADE UNDER SECTION 143(3) AND THEREFORE REOPENING OF THE ASSESSMENT AFTER A LAPSE OF FOUR YEARS WHEN THERE W AS NO FAILURE ON PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY ALL MATERIAL F ACTS WAS BAD IN LAW. IN THE PRESENT YEAR AS WE HAVE SEEN EARLIER REASONS HAVE B EEN DULY RECORDED AND THERE HAD NO ASSESSMENT MADE UNDER SECTION 143(3) A ND THERE WAS TANGIBLE MATERIAL FOR FORMATION OF BELIEF FOR ESCAPEMENT OF INCOME. THEREFORE THE CASES CITED ARE NOT APPLICABLE TO THE FACTS OF THE PRESEN T CASE. 2.12 THE LEARNED AR HAS ALSO REFERRED TO THE JUDGME NT OF HONBLE HIGH COURT OF DELHI IN CASE OF SARTHAK SECURITY VS ITO (SUPRA) . IN THAT CASE THE ASSESSEE HAD RECEIVED SHARE CAPITAL FROM FOUR COMPANIES. THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) AND INT IMATION WAS ISSUED. THEREAFTER NOTICE UNDER SECTION 148 WAS ISSUED FOR ESCAPEMENT OF INCOME ON 14 ACCOUNT OF SHARE CAPITAL. THE HONBLE HIGH COURT NO TED THAT EXISTENCE OF COMPANIES WAS NOT IN DOUBT AND ALL THE FOUR COMPANI ES WERE ASSESSED TO TAX. THE SUMS BY WAY OF SHARE CAPITAL HAD BEEN RECEIVED THROUGH CHEQUES AND THERE WAS NO MATERIAL TO SHOW THAT ANY INCOME HAD E SCAPED ASSESSMENT. THE HIGH COURT ALSO NOTED THAT THE AO IN THAT CASE HAD FAILED TO APPLY HIS INDEPENDENT MIND AND HAD MERELY ACTED ONLY ON THE I NFORMATION RECEIVED FROM THE INVESTIGATION WING. THE REOPENING WAS THEREFORE HELD BAD IN LAW. THE PRESENT CASE AS DISCUSSED EARLIER IS DIFFERENT AS I N THIS CASE THERE WAS MATERIAL FOR FORMATION OF BELIEF THAT CLAIM OF DEDUCTION UND ER SECTION 80HHC WAS NOT ALLOWABLE AND INCOME HAD THUS ESCAPED ASSESSMENT. 2.13 IN VIEW OF THE FOREGOING DISCUSSION AND FOR TH E REASONS GIVEN EARLIER WE HOLD THAT REOPENING OF ASSESSMENT IN THIS CASE WAS BASED ON TANGIBLE MATERIAL HAVING NEXUS WITH THE FORMATION OF BELIEF AND THAT THERE WAS NO CHANGE OF OPINION INVOLVED. WE ACCORDINGLY UPHOLD THE REOPENI NG OF ASSESSMENT MADE BY THE AO UNDER SECTION 147 OF THE INCOME-TAX ACT. 3. THE SECOND DISPUTE IS REGARDING ALLOWABILITY OF CLAIM OF DEDUCTION UNDER SECTION 80HHC ON MERIT. THE FACTS OF THE CASE HAVE ALREADY DISCUSSED EARLIER. THIS GROUND IS COMMON IN ALL THE THREE ASSESSMENT Y EARS AND THEREFORE IS BEING TAKEN UP TOGETHER. THE ASSESSEE AS POINTED OUT EARL IER WAS UNDERTAKING JOB WORK FOR CONSTRUCTION OF TANK/ VESSELS FOR STORAGE OF CHEMICALS, FUELS ETC ON LABOUR BASIS AND/ OR ON TURNKEY BASIS. THE JOB WAS BEING EXECUTED IN TANZANIA. IN ASSESSMENT YEAR 1999-2000, THE AGREEMENT FOR THE PROJECT WAS WITH NATIONAL OIL (TANZANIA) LTD. AND IN A.YRS. 2003-04 AND 2004-05 THOUGH THE NATURE OF WORK REMAINED THE SAME, THE AGREEMENT WAS WITH KENYA PIPELINE CO. LTD. THE AO NOTED THAT IT WAS CLEAR FROM AUDIT REPO RT FOR A.Y.1999-2000 AND 15 2000-01 THAT THE ASSESSEE WAS NOT ENGAGED IN MANUFA CTURE OF ANY COMMODITY/ PRODUCT. THE ASSESSEE WAS ONLY UNDERTAKING JOBS FOR CONSTRUCTION OF TANKS/ VESSELS. THE AO THEREFORE ASKED THE ASSESSEE TO EXP LAIN AS TO WHY DEDUCTION UNDER SECTION 80HHC SHOULD NOT BE DISALLOWED. THE A SSESSEE SUBMITTED THAT SUPPLY OF MATERIAL FOR THE PURPOSE OF ASSESSEES BU SINESS OF EXECUTING TURNKEY JOB WAS PART OF EXPORT ACTIVITY AND THEREFORE PROFI T DERIVED THERE FROM COULD BE QUALIFIED FOR DEDUCTION UNDER SECTION 80HHC. IT WAS ALSO SUBMITTED THAT AS PER THE CONTRACT SIGNED, THE ASSESSEE WAS ENTITLED TO R ECEIVE SEPARATE CONSIDERATION IN RESPECT OF SUPPLY OF EQUIPMENT AND FIELD WORK OF ERECTION AND COMMISSIONING. IT WAS ACCORDINGLY URGED THAT DEDUCT ION CLAIMED SHOULD BE ALLOWED. 3.1 THE AO NOTED THAT THOUGH THE ASSESSEE HAD AMEN DED THE ORIGINAL CONTRACT TO SHOW SUPPLY OF EQUIPMENTS FOR THE PURPO SE OF ERECTION AND COMMISSIONING AS A SEPARATE ACTIVITY A CAREFUL PERU SAL OF TERMS AND CONDITIONS OF THE ORIGINAL AND AMENDED CONTRACT SHOWED THAT TH ERE WAS A COMPOSITE CONTRACT FOR SUPPLY, TRANSPORTATION AND ACTUAL INST ALLATION OF THE PROJECT. THE PROVISION OF PAYMENT AGAINST EACH ACTIVITY WAS ONLY AN ARRANGEMENT FOR THE SAKE OF CONVENIENCE I.E. FOR SUPPLY OF MATERIAL AND FOR CONSTRUCTION BUT THE TWO ACTIVITIES COULD NOT BE SEGREGATED AS THE CONTRACT WAS COMPOSITE. THE CONTRACT WAS CLEARLY MENTIONED AS TURNKEY SUPPLY AND ERECTI ON OF PETROLEUM STORAGE TERMINAL AND AS PER THE CONTRACT AND ASSESSEE WAS TO DESIGN, MANUFACTURE INSTALL AND COMPLETE THE PROJECT WITH DUE CARE AND DILIGENCE. THE VARIOUS ITEMS SUPPLIED BY THE ASSESSEE WERE ONLY TO BE UTILIZED F OR INSTALLATION OF STORAGE TANK AND THEREFORE THESE COULD NOT BE CONSIDERED SEPARAT ELY FROM THE PROJECT. THE DEDUCTION UNDER SECTION 80HHC WAS AVAILABLE ONLY IN RESPECT OF EXPORT OF GOODS OR MERCHANDISE WHICH WAS NOT SATISFIED IN THIS CASE . THE AO ALSO REFERRED TO 16 THE JUDGMENT OF HONBLE SUPREME COURT IN CASE OF CO NTINENTAL CONSTRUCTION LTD. (195 ITR 81) IN WHICH IT WAS HELD THAT PROFIT DERIVED FROM EXECUTION OF COMPOSITE TURNKEY PROJECT MAY FALL BOTH THE SECTION 80 O AND SECTION 80HHB, AND IN CASE SECTION 80HHB COVERED THE SITUATION, SE CTION 80 O WAS NOT APPLICABLE . THE CASE OF THE ASSESSEE WAS THEREFORE COVERED BY SECTION 80HHB AND IN VIEW OF THE RESTRICTION PROVIDED BY SECTION 80HHB(5), DEDUCTION UNDER SECTION 80HHC COULD NOT BE ALLOWED. THE AO ALSO REF ERRED TO THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y.2000-01 IN ITA NO.6252/M/2004 IN WHICH THE TRIBUNAL HAD CONFIRMED THE DISALLOWANCE O F DEDUCTION UNDER SECTION 80HHC. THE AO THEREFORE DISALLOWED THE CLAIM OF DED UCTION UNDER SECTION 80HHC WHICH IN APPEAL WAS CONFIRMED BY CIT(A) AGGRI EVED BY WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3.2 BEFORE US THE LEARNED AR FOR THE ASSESSEE REIT ERATED THE SUBMISSIONS MADE BEFORE LOWER AUTHORITIES THAT THE ASSESSEE WAS A TRADER EXPORTER AND DEDUCTION UNDER SECTION 80HHC SHOULD BE ALLOWED. IT WAS ALSO SUBMITTED THAT THOUGH THE TRIBUNAL IN A.Y.2000-01 HAD CONFIRMED TH E DISALLOWANCE OF DEDUCTION UNDER SECTION 80HHHC, THE HIGH COURT HAD QUASHED THE ORDER. SIMILAR ORDER PASSED BY THE REVENUE IN A.Y.2002-03 HAD BEEN QUASHED BY THE HONBLE HIGH COURT VIDE ORDER DATED 25.6.2010 A COP Y OF WHICH WAS PLACED ON RECORD. IT WAS ACCORDINGLY URGED THAT CLAIM OF DEDU CTION UNDER SECTION 80HHC SHOULD BE ALLOWED. THE LEARNED DR ON THE OTHER HAND SUPPORTED THE ORDERS OF AUTHORITIES BELOW AND SUBMITTED THAT THE HONBLE HI GH COURT IN A.Y.2000-01 A.Y.2002-03 HAD QUASHED THE ASSESSMENT ON TECHNICAL GROUND OF LEGAL VALIDITY OF REOPENING OF ASSESSMENT AND NOT ON MERIT OF ALLO WABILITY OF DEDUCTION UNDER SECTION 80HHC. IT WAS ACCORDINGLY URGED THAT FOLLOW ING THE EARLIER DECISION OF 17 THE TRIBUNAL IN A.Y.2000-01, THE CLAIM OF DEDUCTION UNDER SECTION 80HHC HAD TO BE DISALLOWED. 3.3 WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING ALLOWABILITY OF DEDUCTION UNDER SECTION 80HHC IN CASE OF THE ASSESSEE. THERE IS NO DISPUTE THAT THE ASSESSEE WAS DOING THE BUSINESS OF CONSTRUCTION OF TANKS/ VESSELS FOR STORAGE OF CHEMICALS/ FUELS ETC ON LABOUR BASIS AND/OR TURN KEY BASIS IN TANZAN IA. THE CONTRACT ENTERED WITH THE TANZANIAN COMPANY CLEARLY MENTIONED THE WO RK DONE BY THE ASSESSEE AS TURN KEY SUPPLY AND ERECTION OF PETROLEUM STORA GE TERMINAL. THIS HAS ALSO DULY MENTIONED BY THE AUDITORS IN THE AUDIT REPORT. THE ASSESSEE THUS WAS EXECUTING THE FOREIGN PROJECT FOR INSTALLATION OF S TORAGE TANKS. IN THE SAID PROJECT THE ASSESSEE HAD UTILIZED CERTAIN EQUIPMENT S AND MATERIAL SENT FROM INDIA. THE ORIGINAL CONTRACT WAS SUBSEQUENTLY AMEND ED AND AS PER THE AMENDMENT, TOTAL AMOUNT AGREED UPON FOR THE ENTIRE PROJECT WAS DIVERTED INTO TWO COMPONENTS I.E. SUPPLY OF EQUIPMENT AND IN RESP ECT OF WORK OF ERECTION AND COMMISSIONING. THE ASSESSEE THEREFORE CLAIMED THAT IT WAS EXPORTING EQUIPMENTS AND WAS THUS ENTITLED FOR DEDUCTION UNDE R SECTION 80HHC WHICH WAS AVAILABLE IN RESPECT OF EXPORT OF CERTAIN GOODS OR MERCHANDISE. IN OUR VIEW, MERELY, BIFURCATING THE PAYMENTS IN RESPECT OF SUPP LY OF MATERIAL / EQUIPMENT FOR INSTALLATION OF PROJECT CANNOT MAKE THE ASSESSE E AN EXPORTER OF GOODS WHEN THE JOB OF THE ASSESSEE AS PER THE CONTRACT WAS CLE ARLY TO DESIGN, MANUFACTURE AND INSTALL THE STORAGE TANKS IN THE FOREIGN TERRIT ORY. THE MATERIALS/ EQUIPMENTS TRANSPORTED BY THE ASSESSEE TO THE PROJECT SITE IN THE FOREIGN COUNTRY WAS FOR THE PURPOSE OF UTILIZATION IN THE INSTALLATION OF T ANKS AND COULD NOT BE CONSIDERED AS EXPORT. WE FIND THAT THE SAME ISSUE H AS ALREADY BEEN CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN A.Y.2000- 01 IN ITA NO.6252/M/2004 18 IN WHICH THE TRIBUNAL AFTER DETAILED EXAMINATION OF THE ORIGINAL CONTRACT AND THE AMENDED CONTRACT HELD THAT THE ASSESSEE WAS EXECUTI NG A COMPOSITE PROJECT FOR INSTALLATION OF TANK IN THE FOREIGN COUNTRY AND WAS NOT AN EXPORTER. THE TRIBUNAL OBSERVED THAT THOUGH THE ASSESSEE HAD BIFURCATED TH E PAYMENTS IN RESPECT OF SUPPLY AND EQUIPMENT IN CONNECTION WITH EXECUTION O F THE PROJECT, THIS DID NOT ALTER THE NATURE OF THE PROJECT WHICH WAS INSTALLAT ION OF STORAGE TANK. THE TRIBUNAL ALSO OBSERVED THAT THE ASSESSEE HAD NOT GI VEN ANY SATISFACTORY EXPLANATION FOR MAKING SUCH AMENDMENT. WHATEVER MAY HAVE THE REASONS, THE TRIBUNAL OBSERVED THAT THE BASIC FACT THAT THE ASSE SSEE WAS EXECUTING A PROJECT ON TURN KEY BASIS WAS NOT ALTERED. THE CONTRACT CLE ARLY PROVIDED THAT THE ASSESSEE SHALL DESIGN, MANUFACTURE AND INSTALL AND COMPLETE THE PROJECT, THE COPY RIGHT OF WHICH WAS TO REMAIN WITH THE ASSESSEE . THE AUDITORS HAD ALSO CLEARLY MENTIONED THAT THE ASSESSEE WAS NOT MANUFAC TURE OF ANY COMMODITY/ PRODUCT. THE TRIBUNAL THUS CONCLUDED THAT THE ASSES SEE WAS EXECUTING A COMPOSITE PROJECT WHICH WAS NOT ELIGIBLE FOR DEDUCT ION UNDER SECTION 80HHC. THE FINDINGS GIVEN BY THE TRIBUNAL IS REPRODUCED BE LOW AS A READY REFERENCE. WE HAVE HEARD THE SUBMISSIONS OF BOTH SIDES AT LEN GTH IN THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE MATERIAL PLACE D BEFORE US. AFTER CAREFUL CONSIDERATION OF THE FACTUAL AS WELL AS LEG AL MATRIX OF THE CASE AND ON CONSCIENTIOUS HEARING OF THE SUBMISSIONS, WE ARE OF THE VIEW THAT THIS IS NOT THE CASE WHERE THE ASSESSEE WAS ENGAGED DURING THE YEAR UNDER CONSIDERATION IN THE BUSINESS OF EXPORT OF GO ODS OR MERCHANDISE. THE NECESSARY INGREDIENTS FOR CLAIMING DEDUCTION UN DER SECTION 80HHC ARE THAT THE TAX CONCESSION IS AVAILABLE TO INDIA C OMPANY WHO HAVE EXPORTED OUT OF INDIA FOR QUALIFYING GOODS OR MERCH ANDISE DURING THE RELEVANT ACCOUNTING YEAR. THE SALE PROCEEDS OF THE GOODS EXPORTED MUST 19 BE RECEIVABLE IN CONVERTIBLE FOREIGN EXCHANGE. SECT ION 80HHC HAS DEFINED EXPORT TURNOVER MEANS THE SALE PROCEEDS OF ANY GOODS EXPORTED OUT OF INDIA BUT IT DOES NOT INCLUDE FREIG HT OR INSURANCE ATTRIBUTABLE TO THE TRANSPORT OF THE GOODS OR MERCH ANDISE. SO, THE PROVISIONS OF THIS SECTION APPLIES TO THE SALE PROC EEDS OF SUCH GOODS EXPORTED OUT OF INDIA AND PROCEEDS ARE RECEIVABLE I N CONVERTIBLE FOREIGN EXCHANGE. IN THE LIGHT OF THE TRANSACTION CARRIED O UT BY THE APPELLANT BY EXAMINING THE TERMS AND CONDITIONS OF THE OIL COMPA NY, TANZANIA. THE TERMS AND CONDITIONS OF THE SAID AGREEMENT ADMITTED LY SPECIFY THAT THE INSTALLATION OF STORAGE TANKS WAS UNDERTAKEN AS A T URN KEY PROJECT. THOUGH SUBSEQUENTLY, AN AMENDMENT WAS MADE AND THE TOTAL AMOUNT EARLIER AGREED UPON FOR THE ENTIRE PROJECT WAS BIFU RCATED IN TWO COMPONENTS I.E. SUPPLY OF EQUIPMENT AND THE OTHER C OMPONENT OF AMOUNT WAS IN RESPECT OF THE WORK OF ERECTION AND C OMMISSIONING. BUT THE BASIC NATURE OF THE ENTIRE PROJECT I.E. INSTALL ATION OF STORAGE TANKS WAS NOT ALTERED RATHER IT COULD NOT BE ALTERED. NO SPECIFIC REASON HAS BEEN ASSIGNED OR SATISFACTORY EXPLANATION WAS OFFER ED ABOUT THE NECESSITY FOR THE AMENDMENT OF THE AGREEMENT. PARTI CULARLY WHEN THERE WAS NO CHANGE IN THE SCHEDULE OF PAYMENT AS WELL AS THE NATURE OF PROJECT TO BE COMPLETED. THE ONLY REASON FOR THE SA ID AMENDMENT GIVEN WAS THAT THE EMPLOYER I.E. NATIONAL OIL LTD., TANZA NIA WAS DESIROUS OF HAVING IMPROVED FACILITIES HENCE REQUESTED THE CONT RACTOR I.E. THE ASSESSEE COMPANY TO CARRY OUT CERTAIN JOBS DESCRIBE D IN THE ANNEXURE I, II, III. THIS IS MENTIONED IN CLAUSE II OF AME NDMENT TO CONTRACT AGREEMENT DATED 16.07.1998. THIS AMENDMENT WAS EXEC UTED ON 3 RD DAY OF JUNE 1999. SO THERE WAS NO RE3FERENCE OF ANNEXUR E IV WHICH WAS HEAVILY RELIED UPON BY THE LEARNED A.R. SO THE AMEN DMENT HAD TAKEN 20 PLACE DUE TO THE REASON OF CHANGE IN THE PRICE OF T HE CONTRACT, WHICH IS EVIDENT FROM THE CAUSE OF THE CONTRACT. WHATEVER MA Y BE THE CIRCUMSTANCES UNDER WHICH THE ORIGINAL CONTRACT WAS AMENDED BUT STILL THE BASIC FACT REMAINED UNALTERED THAT THE PROJECT WAS ON A TURN KEY BASIS. THE NOMENCLATURE OF THE ORIGINAL CONTRACT AG REEMENT DATED 16.07.1998 CLEARLY SPECIFIES TURN KEY SUPPLY AND E RECTION OF PETROLEUM STORAGE TERMINAL AND THE ENTIRE CONTRACT REFERS SE VERAL CLAUSES IN THIS REGARD ONLY THAT THE CONTRACT I.E. THE ASSESSEE COM PANY SHALL DESIGN, MANUFACTURE, INSTALL AND COMPLETE THE PROJECT WIT H DUE CARE AND DILIGENCE. WE HAVE ALSO NOTICED THAT CLAUSE XV OF THE CONTRACT AGREEMENT DATED 16.07.98 HAS MENTIONED ABOUT THE CO PY RIGHT WHICH ACCORDING TO THIS CLAUSE REMAINED VESTED WITH THE C ONTRACT I.E. THE ASSESSEE. THIS ALSO SHOWS THAT THE TERMS AND CONDIT IONS OF THE AGREEMENT WERE IN RESPECT OF THE ENTIRE PROJECT AND NOT SEGREGATED IN RESPECT OF GOODS SUPPLIED AS CLAIMED BY THE ASSESSE E. THE ADMITTED POSITION IS THAT THERE WAS A SINGLE CONTRACT FOR SU PPLY OF SPECIFIC ITEMS TO BE UTILIZED FOR INSTALLATION OF STORAGE TANKS. SO T HE INSTALLATION COULD NOT BE SEGREGATED THE ENTIRELY DEPENDENT UPON THE MATER IAL SUPPLIED HENCE BOTH OF THEM WERE INDIVISIBLE. IN ADDITION TO THE A BOVE OBSERVATIONS ONE MORE THING REMAINED UNDISPUTED I.E. THE OBSERVATION OF TAX AUDITOR WHICH WAS NOTICED BY THE ASSESSING OFFICER. ON THE BASIS OF REMARK OF THE AUDITOR THE CLAIM OF DEDUCTION UNDER SECTION 80 HHC WAS DISALLOWED. TAX AUDITOR HAS CLEARLY MENTIONED THAT THE ASSESSEE COMPANY DURING THE YEAR WAS NOT A TRADING CONCERN AND NOT ENGAGED IN T HE MANUFACTURING OF ANY COMMODITY, HOWEVER, UNDERTAKEN THE JOB WORK FOR CONSTRUCTION OF TANKS. SINCE THE AUDITOR OF THE ASSESSEE COMPANY HI MSELF HAD CERTIFIED THAT THERE WAS ONLY JOB WORK UNDERTAKEN BY THE ASSE SSEE, THEREFORE, THE 21 QUESTION OF SUPPLY OF GOODS DID NOT ARISE. THE TERM S AND CONDITIONS OF THE ORIGINAL CONTRACT AS WELL AS AMENDED CONTRACT A RE SO INTRICATELY LINKED WITH EACH OTHER THAT THE SAME COULD NOT BE READ IN ISOLATION OF THE OTHER. 3.4 THE LEARNED AR FOR THE ASSESSEE HAS ALSO ARGUED THAT ASSESSMENT FOR ASSESSMENT YEARS 2000-01 AND 2002-03 HAD BEEN QUASH ED BY THE HIGH COURT AND THEREFORE THESE DECISIONS COULD NOT BE FOLLOWED . WE ARE UNABLE TO ACCEPT THE ARGUMENT. IN THOSE YEARS, THE HIGH COURT HAD QU ASHED THE ASSESSMENT PROCEEDINGS ON THE GROUND THAT RE-ASSESSMENT PROCEE DINGS INITIATED BY THE DEPARTMENT WERE LEGALLY INVALID. THERE WAS NO ISSUE BEFORE THE HIGH COURT RELATING TO THE ALLOWABILITY OF DEDUCTION UNDER SEC TION 80HHC. THE TRIBUNAL IN ASSESSMENT YEAR 2000-01 HAD DULY CONSIDERED THE ALL OWABILITY OF DEDUCTION UNDER SECTION 80HHC AND FOR THE DETAILED REASONS ME NTIONED EARLIER HAD DISALLOWED THE CLAIM. FOLLOWING THE SAME REASONS WI TH WHICH WE AGREE AND FOR THE REASONS GIVEN EARLIER WE HOLD THAT THE ASSESSEE WAS ONLY EXECUTING A FOREIGN PROJECT FOR INSTALLATION OF STORAGE TANK ON TURN KEY BASIS WHICH IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC. THERE I S SPECIFIC PROVISION UNDER SECTION 80HHB FOR ALLOWING DEDUCTION IN RESPECT OF SUCH FOREIGN PROJECTS AND THERE BEING A SPECIFIC PROVISION UNDER THE ACT, CLA IM OF DEDUCTION COULD NOT BE ALLOWED UNDER SECTION 80HHC. WE ACCORDINGLY UPHOLD THE ORDER OF CIT(A) DENYING THE CLAIM OF DEDUCTION UNDER SECTION 80HHC. 3.5 THE ASSESSEE HAS ALSO RAISED THE GROUND MAKING ALTERNATE CLAIM FOR DEDUCTION UNDER SECTION 80HHB AS THE ASSESSEE WAS E XECUTING A FOREIGN PROJECT DEDUCTION IN RESPECT OF WHICH WAS ALLOWABLE UNDER T HE SAID SECTION. IN OUR VIEW THE CLAIM OF THE ASSESSEE COULD BE CONSIDERED UNDER SECTION 80HHB IF THE 22 CONDITIONS MENTIONED THEREIN ARE SATISFIED. THE HON BLE SUPREME COURT IN CASE OF CONTINENTAL CONSTRUCTION LTD. (195 ITR 81) HAVE ALSO HELD THAT PROFIT DERIVED FROM EXECUTION OF COMPOSITE TURN KEY PROJECT MAY FA LL BOTH UNDER SECTION 80 O AND 80HHB AND ONCE THE CLAIM WAS COVERED UNDER SECT ION 80HHB, THE PROVISIONS OF SECTION 80 O WILL NOT APPLY. WE ALSO FIND THAT THIS ALTERNATE CLAIM OF DEDUCTION UNDER SECTION 80HHB HAS BEEN CONSIDERE D BY THE TRIBUNAL IN ASSESSMENT YEAR 2000-01 IN ITA NO.6252/M/2004 IN TH E RECALLED ORDER DATED 30.5.2007 IN WHICH THE TRIBUNAL RESTORED THE ISSUE TO THE FILE OF AO FOR FRESH CONSIDERATION AS PER LAW AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. FACTS THIS YEAR ARE IDENTICAL. THEREFORE RESPECTFUL LY FOLLOWING THE DECISION OF THE TRIBUNAL FOR A.Y.2000-01 (SUPRA) WE RESTORE THE ISS UE OF ALLOWABILITY OF DEDUCTION UNDER SECTION 80HHB TO THE FILE OF AO FOR FRESH DECISION AFTER OPPORTUNITY OF HEARING TO THE ASSESSEE. 4. ITA NO.1361/M/2009 A.Y.2003-04 . IN THIS APPEAL THE ASSESSEE HAS RAISED DISPUTES ON FIVE DIFFERENT GROUNDS. 4.1 THE FIRST DISPUTE IS REGARDING ADDITION ON ACCO UNT OF EMPLOYERS CONTRIBUTION TO PROVIDENT FUND AMOUNTING TO RS.1,45 ,660/-. THE AO HAD DISALLOWED THE SAME AS THE PAYMENT HAD BEEN MADE AF TER DUE DATE. IN APPEAL THE ASSESSEE SUBMITTED THAT CONTRIBUTION HAD BEEN D EPOSITED BEFORE DUE DATE OF FILING THE RETURN OF INCOME AND THEREFORE THE CL AIM SHOULD BE ALLOWED. CIT(A) HOWEVER DID NOT ACCEPT THE CONTENTION AND UPHELD TH E DISALLOWANCE FOLLOWING THE JUDGMENT OF HONBLE HIGH COURT OF MUMBAI IN CAS E OF CIT VS M/S. GODAVARI SAKHAR KHARKHANA (298 ITR 49). AGGRIEVED BY THE SA ID DECISION, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 23 4.2 WE HAVE HEARD BOTH THE PARTIES, PERUSED THE REC ORDS AND CONSIDERED THE MATTER CAREFULLY. THE DISPUTE IS REGARDING ALLOWABI LITY OF DEDUCTION ON ACCOUNT OF EMPLOYERS CONTRIBUTION TO PROVIDENT FUND WHICH HAD BEEN DEPOSITED AFTER DUE DATE. UNDER THE PROVISIONS OF SECTION 43B, CONT RIBUTION TO PF, ESIC ETC WERE ALLOWABLE AS DEDUCTION ONLY IF PAID WITHIN DUE DATE AS PROVIDED UNDER THE RELEVANT STATUTE. HOWEVER, AS PER THE AMENDED PROVI SION OF SECTION 43B APPLICABLE FROM 1.4.2004, CONTRIBUTION TO PF & ESIC ARE ALSO ALLOWABLE AS DEDUCTION IF PAID BEFORE DUE DATE OF FILING THE RET URN OF INCOME. HONBLE SUPREME COURT IN CASE OF ALOME EXTRUSIONS LTD. (319 ITR 306) HAVE HELD THAT THE AMENDED PROVISIONS ARE APPLICABLE FROM RETROSPE CTIVE EFFECT. THEREFORE IN RESPECT OF ASSESSMENT YEAR 1999-2000 ALSO THE CLAIM HAS TO BE ALLOWED IF THE PAYMENT IS MADE BEFORE DUE DATE OF FILING THE RETUR N OF INCOME. WE THEREFORE DIRECT THE AO TO ALLOW THE CLAIM IF THE PAYMENT IS MADE BEFORE FILING THE RETURN OF INCOME AFTER NECESSARY VERIFICATION. 5. THE GROUNDS NOS.2 & 3 RELATE TO DISALLOWANCE UND ER SECTION 40A(3). THE LEARNED AR FOR THE ASSESSEE AT THE TIME OF HEARING OF THE APPEAL DID NOT PRESS THESE GROUNDS. THE GROUNDS NOS.2 & 3 ARE THEREFORE DISMISSED AS NOT PRESSED. 6. THE GROUND NO.4 IS REGARDING ALLOWABILITY OF DED UCTION TO THE ASSESSEE UNDER THE PROVISIONS OF SECTION 80HHC. WE HAVE ALRE ADY EXAMINED THE ISSUE IN DETAIL WHILE DEALING THE APPEAL FOR A.Y.1999-2000 A ND IN VIEW OF THE DECISION VIDE PARA 3.4 OF THIS ORDER WE CONFIRM THE ORDER O F CIT(A) DISALLOWING THE CLAIM UNDER SECTION 80HHC. 7. IN THE GROUND NO.5 THE ASSESSEE HAS RAISED DISPU TE IN RELATION TO COMPUTATION OF INDIRECT COST WHILE CALCULATING DEDU CTION UNDER SECTION 80HHC. 24 THE AO DETERMINED THE INDIRECT COST AT RS.1,42,40,3 79/- IN PLACE OF RS.55,50,780/- RETURNED BY THE ASSESSEE. THE TREATM ENT GIVEN BY THE AO HAS BEEN UPHELD BY THE CIT(A) AGAINST WHICH THE PRESENT APPEAL HAS BEEN FILED. HOWEVER, SINCE WE HAVE HELD THAT THE ASSESSEE IS NO T ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC THIS GROUND HAS BECOME ONLY ACA DEMIC AND IS DISMISSED AS INFRUCTUOUS. 8. ITA NO.2632/M/2009 A.Y.2004-05 . THE ASSESSEE IN THIS APPEAL HAS RAISED DISPUTES ON FIVE DIFFERENT GROUNDS. 8.1 THE FIRST DISPUTE IS REGARDING DISALLOWANCE OF RS.97,855/- CLAIMED BY THE ASSESSEE ON ACCOUNT OF BONUS OR COMMISSION UNDER TH E PROVISIONS OF SECTION 43B. THE AO NOTED FROM AUDITORS REPORT THAT BONUS/ COMMISSION HAD NOT BEEN PAID WITHIN THE TIME PRESCRIBED UNDER SECTION 43B. THE ASSESSEE GAVE NO DETAILS AND THEREFORE AO DISALLOWED THE SAME. IN AP PEAL THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD NOT MADE ANY SUCH P AYMENT AND THE AUDITORS HAD MADE A MISTAKE IN REPORTING. CIT(A) HOWEVER DID NOT ACCEPT THE CONTENTION AND DISALLOWANCE WAS CONFIRMED AGGRIEVED BY WHICH T HE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 8.2 WE HAVE HEARD BOTH THE PARTIES, PERUSED THE REC ORDS AND CONSIDERED THE MATTER CAREFULLY. BEFORE US ALSO NO MATERIAL HAS BE EN PRODUCED TO SHOW THAT AUDIT REPORT WAS WRONG NOR ANY EVIDENCE HAS BEEN PR ODUCED TO SHOW THAT THE PAYMENT HAD BEEN MADE IN TIME. WE THEREFORE CONFIRM THE DISALLOWANCE. 9. THE SECOND DISPUTE IS REGARDING ADDITION OF RS.5 8,599/- ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND. THE AO D ISALLOWED THE CLAIM ON THE 25 GROUND THAT THE PAYMENT HAD BEEN MADE AFTER THE DUE DATE. IN APPEAL CIT(A) HELD THAT SINCE THE PAYMENT WAS NOT MADE EVEN WITHI N THE GRACE PERIOD OF FIVE DAYS FROM THE DUE DATES AND ACCORDINGLY CONFIRMED T HE DISALLOWANCE AGGRIEVED BY WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBU NAL. 9.1 WE HAVE HEARD BOTH THE PARTIES, PERUSED THE REC ORDS AND CONSIDERED THE MATTER CAREFULLY. THE DISPUTE IS REGARDING ALLOWABI LITY OF DEDUCTION ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND. DISAL LOWANCE HAS BEEN MADE ON THE GROUND THAT THE PAYMENT HAD NOT BEEN MADE WITHI N THE DUE DATE PRESCRIBED IN THE RELEVANT STATUTE. HOWEVER WE FIND THAT AS PER THE AMENDED PROVISION OF SECTION 43B WHICH HAVE RETROSPECTIVE A PPLICATION IN VIEW OF THE JUDGMENT OF HONBLE SUPREME COURT IN CASE OF ALOM E XTRUSIONS LTD. (SUPRA) THE CLAIM HAS TO BE ALLOWED IN CASE THE PAYMENT HAS BEE N MADE BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME. WE THEREFORE D IRECT THE AO TO ALLOW THE CLAIM IF THE PAYMENT HAS BEEN MADE BEFORE DUE DATE OF FILING THE RETURN OF INCOME AFTER NECESSARY VERIFICATION. 10. THE THIRD DISPUTE IS REGARDING DISALLOWANCE OF EMPLOYERS CONTRIBUTION TO PF AMOUNTING TO RS.2,12,537/-. THE REASONING FOR DI SALLOWANCE BY THE AUTHORITIES BELOW IS THE SAME AS IN CASE OF EMPLOYE RS CONTRIBUTION AS MENTIONED IN GROUND NO.2. FOLLOWING OUR DECISION IN RELATION TO GROUND NO.2 WE DIRECT THE AO TO ALLOW THE CLAIM IF THE PAYMENT HAS BEEN MADE BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME AFTER NECESSARY VERIFICATION. 11. THE FOURTH DISPUTE IS REGARDING ALLOWABILITY OF DEDUCTION UNDER SECTION 80HHC. WE HAVE ALREADY EXAMINED THE ISSUE IN DETAI L WHILE DEALING THE APPEAL 26 FOR A.Y.1999-2000 AND IN VIEW OF THE DECISION VIDE PARA 3.4 OF THIS ORDER WE CONFIRM THE ORDER OF CIT(A) DISALLOWING THE CLAIM U NDER SECTION 80HHC. 12. THE DISPUTE RAISED IN GROUND NO.5 IS REGARDING THE ALTERNATE CLAIM OF DEDUCTION UNDER SECTION 80HHB. THIS ISSUE WE HAVE A LREADY CONSIDERED WHILE DEALING WITH THE APPEAL FOR A.Y.1999-2000 AND FOLLO WING OUR DECISION VIDE PARA 3.5 OF THIS ORDER WE RESTORE THIS ISSUE TO THE FILE OF AO FOR ADJUDICATING THE ISSUE AFRESH AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 13. IN THE RESULT THE APPEAL OF THE ASSESSEE IN ITA NO.2631/M/2009 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE AND APPEALS OF THE ASSESSEE IN ITA NOS.1361- 2632/M/2009 ARE PARTLY ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 0.05.2011. SD/- SD/- ( D. K. AGARWAL ) (RAJENDRA SIN GH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 20.05.2011 AT :MUMBAI COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A), MUMBAI CONCERNED 4. THE CIT, MUMBAI CITY CONCERNED 5. THE DR C BENCH, ITAT, MUMBAI // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ALK 27