ITO 6(2)(4), MUMBAI V. KOBIAN ELECTRONICS INDIA P. LTD, MUMBAI

ITA 4877/MUM/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59757 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 12-01-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 24-08-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: RAHUL K HAKANI
• Section: 80HHC; 115JB; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH -MUMBAI BEFORE SHRI R.S. PADVEKAR,(J.M.) AND SHRI RAJENDRA SINGH,(A.M.) ITA NO.4877/MUM/2009 ASSESSMENT YEARS : 2006-07 INCOME TAX OFFICER WARD-6(2)(4) MUMBAI. M/S. KOBIAN ELECTRONICS INDIA PVT. LTD., 3, CHUNILAL MEHTA COMPOUND, HARISH ARJUN PALAV MARG, VICTORIA GARDEN, MUMBAI-27 P.A. NO.(AABCK 5701 C) ( APPELLANT ) VS. ( RESPONDENT ) APPELLANT BY SHRI PAWAN VED RESPONDENT BY : : SHRI RAHUL K. HAKANI DATE OF HEARING : 12.1.2012 DATE OF PRONOUNCEMENT : 25.1.2012 O R D E R PER RAJENDRA SINGH (AM) THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 9.7.2009 OF CIT(A) FOR THE ASSESSMENT YEAR 2006-07. THE DISPUTES RAISED IN THIS APPEAL RELATES TO NATURE OF INCOME F ROM IMPORT ENTITLEMENTS AND ALLOWABILITY OF PROFIT ELIGIBLE FO R DEDUCTION UNDER SECTION 80HHC WHILE COMPUTING BOOK PROFITS UNDER SECT ION 150JB. 2. WE FIRST TAKE UP THE ISSUE REGARDING NATURE OF I NCOME FROM IMPORT ENTITLEMENTS. THE AO NOTED THAT THE ASSESSE E HAD SHOWN INCOME OF RS.54.08 LACS FROM IMPORT ENTITLEMENT AND DUTY DRAWBACK OF RS.33.90 LACS. THE AO, THEREFORE, ASKED THE ASSESS EE TO EXPLAIN AS TO WHY THE ABOVE AMOUNT SHOULD NOT BE CONSIDERED AS IN COME AND CLAIM OF DEDUCTION UNDER SECTION 80IB IN RESPECT OF THE S AID ISSUE SHOULD NOT BE DISALLOWED. THE ASSESSEE SUBMITTED THAT THE IMP ORT ENTITLEMENT OF ITA NO.4877/M/09 A.Y. :06-07 2 RS.54.08 LACS REFERRED TO ENTITLEMENT OF THE COMPAN Y FOR DEPB LICENCE. THE ASSESSEE HAD UTILIZED ONLY A SUM OF RS.11,50,01 2/- IN THE BUSINESS WHICH WOULD ONLY GO TO REDUCE THE COST OF THE MATER IAL. NO PART OF THE ENTITLEMENT HAD BEEN TRANSFERRED AND, THEREFORE, PR OVISIONS OF SECTION 28(IIID) WERE NOT APPLICABLE. IT WAS THUS ARGUED T HAT THE SUM OF RS.54.08 LACS WAS NOT TAXABLE. AS REGARDS DUTY DRAW BACK, IT WAS SUBMITTED THAT THE SAME REPRESENTED REFUND OF THE I MPORT DUTY PAID AND THEREFORE, THERE WAS NO INCOME ELEMENT INVOLVED . THE ASSESSEE ACCORDINGLY ARGUED THAT NONE OF THE ABOVE AMOUNTS W AS TAXABLE. THE AO HOWEVER DID NOT ACCEPT THE CONTENTIONS RAISED. IT WAS OBSERVED BY HIM THAT THE ASSESSEE HAD CREDITED THE DEPB AMOUNT IN THE P&L ACCOUNT AND OFFERED THE SAME AS INCOME. THE ASSES SEE HAD ALSO TREATED DEPB CREDIT AS INCOME WHILE COMPUTING DEDUC TION ALLOWABLE UNDER SECTION 80HHC FOR THE PURPOSE OF SECTION 115JB. AS FOR THE DUTY DRAW BACK, THE SAME HAD BEEN NETTED AGAINST THE CUS TOM DUTY PAYABLE AND NOT SHOWN ON THE CREDIT SIDE OF P&L ACCOUNT. B OTH DEPB CREDIT AND DUTY DRAWBACK HAD BEEN SHOWN AS INCOME WHILE CO MPUTING DEDUCTION UNDER SECTION 80IB/80IC. THE AO THEREFORE , HELD THAT BOTH THESE AMOUNTS REPRESENTED INCOME TAXABLE WHICH WERE NOT ENTITLED FOR DEDUCTION UNDER SECTION 80 IB AND 80IC AS THESE WER E NOT DERIVED FROM THE INDUSTRIAL UNDERTAKING. 2.1 ASSESSEE DISPUTED THE DECISION OF AO AND SUBMIT TED BEFORE CIT(A) THAT THE DEPB CREDIT WAS NOT INCOME UNDER SE CTION 28(IIID) AS THESE WERE NOT TRANSFERRED. IT WAS ALSO SUBMITTED THAT, THE ASSESSEE HAD NOT EVEN APPLIED FOR DEPB CREDIT OF RS.42,58,23 0/- AND THEREFORE, IT COULD NOT BE TAXED AS INCOME. AS REGARDS THE DU TY DRAWBACK IT WAS SUBMITTED THAT THE SAME REPRESENTED REFUND OF CUSTO M DUTY PAID UNDER CLAUSE 74 OF EXIM POLICY AS PER WHICH, IN CAS E, THE ASSESSEE RE- EXPORTS THE DUTY PAID IMPORTED MATERIAL IT WAS ENTI TLED FOR REFUND OF DUTY. THE REFUND OF DUTY WAS IN RELATION TO RE-EXP ORT OF DUTY PAID GOODS SUCH AS MOTHER BOARD, MONITOR ETC. THERE WAS THEREFORE, NO ITA NO.4877/M/09 A.Y. :06-07 3 INCOME INVOLVED IN THE TRANSACTION. CIT(A) AGREED W ITH THE SUBMISSION OF THE ASSESSEE. IT WAS OBSERVED BY HIM THAT DEPB CREDIT HAD BEEN SHOWN BY THE ASSESSEE ONLY ON ESTIMATE BASIS WITHOU T RECEIVING IT AND, THEREFORE, IT COULD NOT BE CONSIDERED AS INCOME. F URTHER, THERE WAS NO TRANSFER OF DEPB CREDIT AND, THEREFORE PROVISIONS O F SECTION 28(1)(IIID) WERE NOT APPLICABLE. THUS DEPB CREDIT COULD NOT BE ASSESSED AS INCOME EITHER UNDER SECTION 28(IIIA) OR 28(IIID) OR 28(IV) . HE THEREFORE, DIRECTED THE AO TO EXCLUDE DEPB CREDIT FROM THE TOT AL INCOME. AS REGARDS THE DUTY DRAWBACK, CIT(A) HELD THAT IT WAS ONLY REFUND OF CUSTOM DUTY ALREADY PAID BY THE ASSESSEE AND, THERE FORE, NOT INCENTIVE. THERE WAS THUS NO INCOME ELEMENT INVOLV ED. HE ACCORDINGLY HELD THAT EVEN THE DUTY DRAW BACK COULD NOT BE ASSESSED AS INCOME. AGGRIEVED BY SAID DECISION REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 2.2 BEFORE US, THE LD. AR FOR THE ASSESSEE SUBMITTE D THAT THE ASSESSEE DID NOT EVEN APPLY FOR DEPB CREDIT AND, TH EREFORE NO INCOME HAD ACCRUED ON THIS ACCOUNT. IT WAS ALSO SUBMITTED THAT SIMILAR ISSUE HAD ARISEN IN ASSESSEES OWN CASE IN ASSESSMENT YEA R 2005-06 AND THE TRIBUNAL HAD RESTORED THE ISSUE TO THE FILE OF AO F OR FRESH ADJUDICATION IN THE LIGHT OF JUDGMENT OF HONBLE HIGH COURT OF BOM BAY IN THE CASE OF KALPATARU COLOURS AND CHEMICALS (328 ITR 451). AS REGARDS DUTY DRAWBACK, THE LD. AR REITERATED THE SUBMISSIONS MAD E BEFORE LOWER AUTHORITIES THAT IT WAS NOT INCENTIVE AND ONLY REFU ND OF DUTY ALREADY PAID AND, THEREFORE, NO INCOME ELEMENT WAS INVOLVED . RELIANCE WAS PLACED ON THE DECISION OF DELHI BENCH OF THE TRIBU NAL IN THE CASE OF J.K. ALUMINIUM CO. VS. ITO IN ITA NO.3303/DEL/2010. THE LD. DR ON THE OTHER HAND SUPPORTED THE ORDER OF AO AND PLACED RELIANCE ON THE FINDINGS GIVEN BY AO. IT WAS ALSO SUBMITTED THAT T HE DECISION OF THE TRIBUNAL RELIED UPON BY THE LD. AR WAS DISTINGUISHA BLE. ITA NO.4877/M/09 A.Y. :06-07 4 2.3 WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING TA XABILITY OF DUTY DRAWBACK AND DEPB CREDIT. THE TAXABILITY OF INCOME ON ACCOUNT OF DEPB CREDIT AND DUTY DRAWBACK HAD BEEN CONSIDERED I N DETAIL BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF TOPMAN EXPORTS (318 ITR(AT) 87). THE TRIBUNAL IN THE SAID CASE NOTED T HAT THE OBJECTIVE OF DEPB SCHEME OR DUTY DRAWBACK WAS TO NEUTRALIZE THE INCIDENCE OF CUSTOMS DUTY ON THE IMPORT CONTENT OF EXPORT PRODUC T. THESE WERE POST EXPORT CLAIMS AND THEREFORE COULD BE AVAILED O NLY AFTER EXPORTS WERE MADE AND ON APPLICATION MADE WITHIN SPECIFIED TIME. IT IS ONLY WHEN EXPORTER MAKES APPLICATION AFTER EFFECTING EXP ORT THAT HE ACQUIRED RIGHT TO SUCH DEPB CREDIT OR DUTY DRAW BAC K. THUS INCOME ACCRUES AFTER APPLICATION IS MADE TO THE CONCERNED AUTHORITY. IN THE PRESENT CASE, THE ASSESSEE HAD CLAIMED THAT IT HAD NOT MADE ANY APPLICATION DURING THE YEAR FOR DEPB CREDIT AND HAD SHOWN THE AMOUNT IN THE P&L ACCOUNT ONLY ON ESTIMATE BASIS. WE FIND SUCH CLAIMS WERE MADE BEFORE CIT(A) BUT CIT(A) HAS NOT GIVEN ANY FI NDINGS ON THIS ASPECT. ONCE THE APPLICATION HAS BEEN MADE, THE IN COME ON ACCOUNT OF DEPB CREDIT ACCRUES AND THEREAFTER IRRESPECTIVE OF THE FACT WHETHER DEPB CREDIT IS TRANSFERRED OR NOT ENTIRE FACE VALUE OF THE DEPB CREDIT AND PROFIT IN CASE OF SALE HAS TO BE ASSESSED AS IN COME UNDER SECTION 28(IIID) OF THE ACT IN VIEW OF THE JUDGMENT OF HONB LE BOMBAY HIGH COURT IN THE CASE KALPATARU COLOURS & CHEMICALS (SU PRA). AS FULL FACTS ARE NOT AVAILABLE, THE ISSUE REQUIRES FRESH EXAMINA TION IN THE LIGHT OF THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN TH E CASE OF TOPMAN EXPORTS (SUPRA) AND JUDGMENT OF HONBLE HIGH COURT O F BOMBAY IN THE CASE OF KALPATARU COLOURS & CHEMICALS (SUPRA). WE, THEREFORE, RESTORE THIS ISSUE TO THE FILE OF AO FOR PASSING A FRESH OR DER IN THE LIGHT OF OBSERVATIONS MADE ABOVE AND AFTER ALLOWING OPPORTUN ITY OF HEARING TO THE ASSESSEE. ITA NO.4877/M/09 A.Y. :06-07 5 2.4 AS REGARDS DUTY DRAW BACK, THE ASSESSEE HAS SUB MITTED THAT IT WAS ONLY REFUND OF CUSTOMS DUTY ALREADY PAID IN RES PECT OF GOODS IMPORTED AND, THEREFORE, THE SAME WAS NOT TAXABLE. RELIANCE HAS BEEN PLACED ON THE DECISION OF DELHI BENCH OF THE TRIB UNAL IN THE CASE OF M/S. J.K. ALUMINIUM CO. IN ITA NO.3303/DEL/2010. W E HAVE PERUSED THE SAID ORDER OF TRIBUNAL WHICH IS BASED ON IDENTI CAL CASE OF CIT VS. DHARAMPAL PREMCHAND LTD. (317 ITR 353) DECIDED BY T HE HONBLE HIGH COURT OF DELHI. IN THAT CASE, THE ASSESSEE WAS MAN UFACTURING PRODUCTS WHICH WERE EXEMPT FROM EXCISE DUTY HOWEVER, AS PER PROCEDURE LAID, THE ASSESSEE HAS TO FIRST PAY EXCISE DUTY ON REMOVA L OF GOODS FROM THE BONDED WAREHOUSE AND MAKE CLAIM OF REFUND OF EXCISE DUTY PAID BY THE SEVENTH DAY OF THE FOLLOWING MONTH. THE PAYMEN TS HAD BEEN DEBITED IN THE P&L ACCOUNT AND ON REFUND IDENTICAL AMOUNT HAD BEEN CREDITED TO THE P&L ACCOUNT. THUS THERE WAS NO EFF ECT ON THE PROFIT/LOSS. THE HONBLE HIGH COURT OBSERVED THAT R EFUND OF EXCISE DUTY WAS DIRECTLY LINKED TO MANUFACTURING ACTIVITY AND, THEREFORE, THE SAME COULD NOT BE EXCLUDED FOR COMPUTING DEDUCTION UNDER SECTION 80IB OF THE ACT. THE CASE OF THE ASSESSEE IS DIFFE RENT. THE ASSESSEE IS NOT MANUFACTURING ANY EXCISE DUTY FREE PRODUCT. TH E ASSESSEE IS ENTITLED TO REFUND OF EXCISE DUTY ON EXPORT OF GOOD S UNDER THE EXIM POLICY. HOWEVER, THE FULL FACTS ARE NOT CLEAR. IT IS NOT CLEAR WHETHER DUTY PAID IMPORTED MATERIAL HAD BEEN EXPORTED AS SU CH OR IT HAD BEEN UTILIZED IN THE MANUFACTURE OF SOME PRODUCT WHICH H AD BEEN EXPORTED. IN CASE THE DUTY PAID IMPORTED MATERIAL HAD BEEN EX PORTED, IN THE SAME CONDITION, THERE IS NO MANUFACTURING ACTIVITY AND THEREFORE, ASSESSEE WILL NOT BE ENTITLED FOR DEDUCTION UNDER S ECTION 80IB. HOWEVER, IN CASE DUTY PAID IMPORTED MATERIAL HAS BEE N USED IN THE MANUFACTURE OF SOME PRODUCT WHICH HAS BEEN EXPORTED AND AFTER EXPORT THE ASSESSEE IS ENTITLED TO REFUND OF IMPORT DUTY PAID ON THE IMPORTED MATERIAL IT WILL BE A CASE OF INCENTIVE WH ICH IS TAXABLE AND IN RESPECT OF WHICH ASSESSEE WILL NOT BE ENTITLED TO D EDUCTION UNDER SECTION 80IB OF THE ACT IN VIEW OF THE JUDGMENT OF HONBLE SUPREME ITA NO.4877/M/09 A.Y. :06-07 6 COURT IN THE CASE OF LIBERTY INDIA (317 ITR 218). IN OUR VIEW ENTIRE ACTIVITY OF IMPORT OF MATERIAL AND EXPORT OF GOODS AS WELL AS THE SCHEME UNDER WHICH ASSESSEE WAS ENTITLED FOR DUTY D RAWBACK IS REQUIRED TO BE EXAMINED IN DETAIL TO FIND OUT THE R EAL NATURE OF INCOME AND ALLOWABILITY OF DEDUCTION UNDER SECTION 80IB. WE, THEREFORE, SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BA CK TO THE FILE OF AO FOR PASSING A FRESH ORDER AFTER NECESSARY EXAMINAT ION AND AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 3. THE SECOND DISPUTE IS REGARDING REDUCTION OF THE PROFIT ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC OF THE ACT WHILE CO MPUTING BOOK PROFIT UNDER SECTION 115JB OF THE ACT. THE AO NOTE D THAT THE ASSESSEE HAD REDUCED AN AMOUNT OF RS.7,47,47,332/- AS PROFIT ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC(3) WHILE COMPUTING BOOK PROFIT UNDER SECTION 115JB. THE AO NOTED THAT UNDER CLAUSE (IV) OF EXPLANATION 1 TO SECTION 115JB(2), THE AMOUNT OF PROFIT ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC COMPUTED UNDER CLAUSE (A), (B) OR (C) OF SUB SECTION(3) OR UNDER SUB SECTION (3A) WAS REQUIRED TO BE REDUCE D FROM THE BOOK PROFIT. THE AO FURTHER NOTED THAT UNDER SECTION 80 HHC(1B), THE DEDUCTION ALLOWABLE WAS PHASED OUT DURING ASSESSMEN T YEARS 2001-02 TO 2004-05 AND FROM 2005-06, NO DEDUCTION WAS ALLOW ABLE UNDER SECTION 80HHC. THE AO, THEREFORE, HELD THAT THERE WA S NO PROFIT ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC FROM ASSES SMENT YEAR 2005-06 ONWARDS AND THUS DISALLOWED THE CLAIM OF TH E ASSESSEE. ALTERNATIVELY, THE AO ALSO HELD THAT SINCE EXPORT T URNOVER EXCEEDED RS .10.00 CRORES, THE ASSESSEE WAS NOT ENTITLED TO DED UCTION UNDER SECTION 80HHC IN RESPECT OF EXPORT INCENTIVES IN RS.8 7,98,358/- AS CONDITIONS MENTIONED IN THE 3 RD PROVISO TO SECTION 80HHC(3) WERE NOT FULFILLED AND THEREFORE, DEDUCTION UNDER SECTION 80 HHC EVEN IF FOUND ALLOWABLE HAD TO BE REDUCED TO THAT EXTENT. IN APP EAL CIT(A) HELD THAT PROFIT ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC ON THE BASIS OF ADJUSTED BOOK PROFIT AMOUNTING TO RS.9,23,17,316/- HAD TO BE REDUCED ITA NO.4877/M/09 A.Y. :06-07 7 WHILE WORKING OUT THE BOOK PROFIT IN VIEW OF THE DE CISION OF THE TRIBUNAL IN THE CASE OF DCIT VS. M/S. SYNCOME FORMULATIONS (I) LTD. DATED 14.3.2005 IN ITA NO.2711/M/2003. AGGRIEVED BY THE S AID DECISION THE REVENUE IS IN APPEAL. 3.1 BEFORE US THE LD. AUTHORISED REPRESENTATIVE SUB MITTED THAT THE SAME ISSUE HAD ARISEN IN ASSESSMENT YEAR 2005-06 IN WHICH THE TRIBUNAL IN ORDER DATED 28.9.2011 IN ITA NO.967/M/2 009 HELD THAT FOLLOWING THE JUDGMENT OF HON'BLE SUPREME COURT IN T HE CASE OF AJANTA PHARMA LTD. (327 ITR 305) ENTIRE EXPORT PROFIT EARN ED BY THE ASSESSEE WAS ELIGIBLE PROFIT UNDER SECTION 80HHC(3) AND THUS B E REDUCED UNDER SECTION 115JB. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND SUBMITTED THAT SINCE FROM ASSESSMENT YEAR 2005 -06 NO DEDUCTION WAS ALLOWABLE, NO DEDUCTION ON ACCOUNT OF SECTION 80HHC COULD BE ALLOWED WHILE COMPUTING BOOK PROFITS. 3.2 WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING RE DUCTION OF BOOK PROFIT BY THE AMOUNT OF PROFIT ELIGIBLE FOR DEDUCTION UNDE R SECTION 80HHC UNDER THE PROVISIONS OF CLAUSE (IV) OF EXPLANATION- 1 OF SECTION 115JB. THE AMOUNT OF PROFIT ELIGIBLE FOR DEDUCTION UNDER S ECTION 80HHC COMPUTED UNDER CLAUSE (A)(B) OR (C) OF SUB SECTION (3) OR SUB SECTION (3A) OF SECTION 80 HHC(3) IS REQUIRED TO BE REDUCED F ROM BOOK PROFIT UNDER THE PROVISIONS OF CLAUSE(IV) OF EXPLANATION-I OF SECTION 115JB(2). EARLIER THERE WAS A DEBATE AS TO WHETHER PROFIT ELI GIBLE FOR DEDUCTION UNDER SECTION 80HHC(3)/80HHC(3A) HAS TO BE REDUCED OR ONLY THE DEDUCTION ACTUALLY ALLOWABLE UNDER SECTION 80HHC(1B) IS REQUIRED TO BE REDUCED FROM THE BOOK PROFIT. THE SAID CONTROVERSY IS SETTLED BY THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF AJ ANTA PHARMA LTD. (SUPRA), IN WHICH IT HAS BEEN HELD THAT IT IS THE P ROFIT ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC AND NOT ACTUAL DEDUCTIO N ALLOWABLE UNDER SECTION 80HHC WHICH IS REQUIRED TO BE REDUCED. HOWEVER, THE DEDUCTION ALLOWABLE UNDER SECTION 80HHC HAS BEEN DONE AWAY WITH IN ITA NO.4877/M/09 A.Y. :06-07 8 A PHASED MANNER AND SINCE ASSESSMENT YEAR 2005-06, NO DEDUCTION IS ALLOWABLE. THE CLAUSE (IV) OF EXPLANATION 1 TO SECT ION 115JB(2) HAS ALSO BEEN OMITTED BY THE FINANCE ACT 2011 W.E.F. 1. 4.2005 AND, THEREFORE, FROM ASSESSMENT YEAR 2005-06, BOOK PROF IT IS NOT REQUIRED TO BE REDUCED BY THE AMOUNT OF PROFIT ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC AS DEDUCTION UNDER SECTION 80HHC IS NO LO NGER AVAILABLE FROM ASSESSMENT YEAR 2005-06. THEREFORE, THE ASSESSEE IS NOT ENTITLED FOR ANY DEDUCTION UNDER SECTION 115JB( 2). THE SAID AMENDMENT HAD NOT BEEN BROUGHT TO THE NOTICE OF THE TRIBUNAL IN ASSESSMENT YEAR 2005-06. IN VIEW OF THE AMENDED PR OVISIONS, THE ASSESSEE IS NOT ENTITLED FOR ANY REDUCTION OF BOOK PROFIT ON ACCOUNT OF SECTION 80HHC. WE, THEREFORE, HOLD THAT THE ASSESSEE WILL NOT BE ENTITLED FOR ANY REDUCTION OF BOOK PROFIT ON ACCOUN T OF SECTION 80HHC DEDUCTION OR PROFIT ELIGIBLE FOR DEDUCTION UNDER SE CTION 80HHC. WE ACCORDINGLY SET ASIDE THE ORDER OF CIT(A) AND ORDER OF AO DISALLOWING THE CLAIM IS UPHELD. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED IN TERMS OF THE ORDER ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 25.1.2012 SD/- SD/- (R.S. PADVEKAR) JUDICIAL MEMBER (RAJENDRA SINGH) ACCOUNTANT MEMBER MUMBAI, DATED: 25.1.2012. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.