DY CIT RG 7(2), MUMBAI V. M/S SULPHUR MILLS LTD, MUMBAI

ITA 6834/MUM/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1015 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 07-07-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 12-11-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K BALODIA
• Assessee Lawyers: K S CHOKSI
• Keywords: Business income; Principle of natural justice; Set aside
• Section: 80HHC; 234B; 80IB; 10B; 80IA; 263

Judgement Text

ITA NO. 6871 & 6872/MUM/2007 ITA NO.6834/MUM./2007 A.Y : 01-02, 04-05 AND 04-05 PAGE 1 OF 15 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI J BENCH, MUMBAI BEFORE SHRI D. K. AGARWAL, (JUDICIAL MEMBER) AND SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER) ITA NO. 6871 AND 6872/MUM/2007 ASSESSMENT YEAR 2001-02 AND 2004-05 DATE OF HEARING : 15.7.2010 SULPHUR MILLS LIMITED ...... APPELLANT 604/605, 349, BUSINESS POINT WESTERN EXPRESS HIGHWAY ANDHERI (E), MUMBAI 400 069 PAN AABCS8736K VS. INCOME TAX OFFICER, WARD7(2)(4) .. RESP ONDENT AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400 020 ITA NO. 6834/MUM/2007 ASSESSMENT YEAR : 2004-05 DATE OF HEARING : 15.7.2010 DY. COMMISSIONER OF INCOME TAX 7(2) .... APPELLANT AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400 020 VS. SULPHUR MILLS LIMITED ..... RESPONDENT 604/605, 349, BUSINESS POINT WESTERN EXPRESS HIGHWAY ANDHERI (E), MUMBAI 400 069 PAN AABCS8736K ITA NO. 6871 & 6872/MUM/2007 ITA NO.6834/MUM./2007 A.Y : 01-02, 04-05 AND 04-05 PAGE 2 OF 15 ASSESSEE BY : SHRI K.S. CHOKSI REVENUE BY : SHRI N.K. BALODIA O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THESE THREE APPEALS, THE ASSESSEE AS WELL AS THE ASSESSING OFFICER HAVE CALLED INTO QUESTION CORRECTNESS OF LD . CIT(A)S ORDERS OF EVEN DATED 21 ST AUGUST 2007,, FOR ASSESSMENT YEAR 2001-02 AND 2004 -05. SINCE ALL THESE APPEALS PERTAIN TO THE SAME ASSESSE E, THEREFORE, THESE APPEALS WERE HEARD TOGETHER AND, AS A MATTER OF CON VENIENCE, THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER. 2. FIRST, WE TAKE UP ASSESSEES APPEAL IN ITA NO.6871/ MUM./2007 FOR ASSESSMENT YEAR 2001-02. GRIEVANCE ARISING OUT OF G ROUND NO.1, IS AS FOLLOWS:- 1. THE LD. CIT(A) HAS ERRED IN APPROVING ORDER U/S 263 AS VALID ON THE TWO SPECIFIC DIRECTION WHICH IS AGAINS T PRINCIPLES OF NATURAL JUSTICE. WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A) HAS ERRED IN REDUCING RELIEF U/S 80IB OF THE ACT FROM DEDUCTION U/S 80HHC ITA NO. 6871 & 6872/MUM/2007 ITA NO.6834/MUM./2007 A.Y : 01-02, 04-05 AND 04-05 PAGE 3 OF 15 OF THE ACT WITHOUT CONSIDERING FACTS AND CIRCUMSTAN CES OF THE CASE. SAME BE ALLOWED. 2. THE LD. CIT(A) ERRED IN GRANTING DEDUCTION U/S 8 0IB OF THE ACT AT RS.14,74,120/- IN PLACE OF RS.73,55,083/ - AS CLAIMED BY ASSESSEE. SAME BE ALLOWED. 3. THE LD. CIT(A) HAS ERRED IN NOT GRANTING DEDUCTI ON U/S 80HHC OF THE ACT AT RS.1,72,58,195/- AS CLAIMED BY THE ASSESSEE. SAME BE ALLOWED. 3. LEARNED REPRESENTATIVES AGREE BEFORE US THAT THI S ISSUE IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF THIS TRIBUN AL IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 1999-2000, WHEREIN, THE T RIBUNAL, IN AN APPEAL FILED BY THE REVENUE IN ITA NO.4662/MUM./2003, VIDE ORDER DATED 6 TH DECEMBER 2007, HAS DECIDED THIS ISSUE AGAINST THE A SSESSEE BY OBSERVING AS FOLLOWS:- THE LD. DR SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE REVENUE WITH THE DECISION OF CHENNAI SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS ROGINI GARMENTS, RE PORTED IN 108 ITD 49 (CHEN.) (SB). LEARNED COUNSEL FOR THE AS SESSEE SUBMITTED THAT THE ISSUE WAS DECIDED IN FAVOUR OF T HE ASSESSEE BY THE TRIBUNAL IN EARLIER ASSESSMENT YEAR 1998-99. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SPE CIAL BENCH DECISION IN THE CASE OF RAGINI GARMENTS IS NOT APPL ICABLE AS THAT WAS A REVERSE CASE. WE HAVE CONSIDERED THE RIV AL SUBMISSIONS. WE FIND THAT THE DECISION OF SPECIAL B ENCH OF CHENNAI TRIBUNAL IN THE CASE OF ACIT VS ROGINI GARM ENTS ITA NO. 6871 & 6872/MUM/2007 ITA NO.6834/MUM./2007 A.Y : 01-02, 04-05 AND 04-05 PAGE 4 OF 15 (SUPRA) SQUARELY COVERS THE ISSUE OF REDUCTION OF D EDUCTION FROM SEC. 80IA PROFITS FOR DEDUCTION GRANTED U/S 80 HHC OF THE ACT IN FAVOUR OF THE REVENUE AND ACCORDINGLY, THE I SSUE IS DECIDED IN FAVOUR OF THE REVENUE AND THE GROUND OF APPEAL NO.3 IS ALLOWED. 4. THE SAME IS THE VIEW TAKEN BY SPECIAL BENCH IN T HE CASE OF ACIT VS HINDUSTAN MINT & AGRO PRODUCTS PVT LTD (119 ITD SB 107). IN VIEW OF THESE JUDICIAL PRECEDENTS, INCLUDING IN ASSESSEES OWN CASE, WE VACATE THE ORDER OF THE LD. CIT(A) AND ALLOW THE GROUND OF APP EAL RAISED BY THE ASSESSING OFFICER. LEARNED COUNSEL, HOWEVER, SUBMIT S THAT EVEN AFTER GIVING EFFECT TO THE DECISION OF HINDUSTAN MINT (SU PRA), CERTAIN ISSUES WILL HAVE TO BE CONSIDERED BY THE ASSESSING OFFICER. IN ANY CASE, ACCORDING TO THE LEARNED COUNSEL, THIS ISSUE HAS COME UP FOR CON SIDERATION BEFORE HONBLE BOMBAY HIGH COURT AND THE JUDGMENT IS EXPEC TED SHORTLY. HE, THEREFORE, URGES US TO REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION AFRESH IN THE LIGHT OF SPECIAL BEN CH DECISION IN THE CASE OF HINDUSTAN MINT (SUPRA) AND OR SUCH OTHER JUDICIA L PRECEDENTS AS MAY BY THEN BE AVAILABLE BY THEN FOR CONSIDERATION. LEA RNED DEPARTMENTAL REPRESENTATIVE DOES NOT SERIOUSLY OPPOSE THIS PLEA. THE MATTER IS THUS RESTORED TO THE FILE OF THE CIT(A) FOR FRESH ADJUDI CATION AS SUCH. 5. GROUND NOS. 1 TO 3 ARE THUS ALLOWED FOR STATISTI CAL PURPOSES IN THE TERMS INDICATED ABOVE. 6. GRIEVANCE ARISING OUT OF GROUND NO.4, IS AS FOLL OWS:- ITA NO. 6871 & 6872/MUM/2007 ITA NO.6834/MUM./2007 A.Y : 01-02, 04-05 AND 04-05 PAGE 5 OF 15 4. THE LEARNED CIT(A) HAS ERRED IN NOT GRANTING R ELIEF IN RESPECT OF INSIST U/S 234B AND 234D WITHOUT CONSIDE RING FACT OF CIRCUMSTANCES OF THE CASE. SAME BE ALLOWED. 7. THIS ISSUE BEING CONSEQUENTIAL IN NATURE, THEREF ORE, WE ARE NOT REQUIRED TO ADJUDICATE UPON THIS ISSUE SEPARATELY. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. 9. NOW, WE TAKE UP ASSESSEES APPEAL IN ITA NO.6872 /MUM./2007, FOR ASSESSMENT YEAR 2004-05. 10. GRIEVANCE ARISING OUT OF GROUND NO.1(A), IS AS FOLLOWS:- 1A. THE LEARNED INCOME TAX OFFICER HAS ERRED IN TR EATING INTEREST INCOME OF RS.39,46,610/- AS INCOME FROM OT HER SOURCES AND NOT FROM THE BUSINESS. THE SAME BE ASSESSED AS INCOME FROM BUSINESS. B. WITHOUT PREJUDICE TO ABOVE, IT IS CLAIMED THAT 9 0% OF ONLY NET INTEREST BE REDUCED FROM THE PROFITS OF T HE BUSINESS FOR THE PURPOSE OF CALCULATING DEDUCTION U/S 80HHC. ITA NO. 6871 & 6872/MUM/2007 ITA NO.6834/MUM./2007 A.Y : 01-02, 04-05 AND 04-05 PAGE 6 OF 15 11. HAVING HEARD THE RIVAL SUBMISSIONS AND HAVING P ERUSED THE MATERIAL ON RECORD, WE FIND THAT THIS ISSUE IS COV ERED, AGAINST THE ASSESSEE, BY DECISION OF A CO ORDINATE BENCH, IN A SSESSEES OWN I.E. ITA NO.6872/MUM./2007, FOR THE ASSESSMENT YEAR 2004-05. LEARNED COUNSEL FOR THE ASSESSEE DOES NOT DISPUTE THIS FACT BUT REL IES UPON THE STAND TAKEN BY THE AUTHORITIES BELOW, AS ALSO THE FACT THAT THE CIT(A) HAS CATEGORICALLY NOTED THE NEXUS BETWEEN INTEREST RECEIVED AND INTER EST PAID. WE, HOWEVER, SEE NO REASONS TO TAKE ANY OTHER VIEW OF T HE MATTER THAN THE VIEW TAKEN BY THE COORDINATE BENCH IN ASSESSEES OW N CASE. RESPECTFULLY FOLLOWING THE SAME, WE REJECT THE GRIEVANCE OF THE ASSESSEE AND DECLINE TO INTERFERE IN THE MATTER. 12. GROUND NO. 1A AND 1B ARE THUS DISMISSED. 13. IN GROUND NO. 2 , THE ASSESSEE HAS RAISED THE F OLLOWING GRIEVANCE: 2. THE LEARNED INCOME TAX OFFICER HAS ERRED IN ADJ USTING PROCESSING CHARGES RECEIVED OF RS.12,73,447/- TO TO TAL TURNOVER FOR GRANTING DEDUCTION U/S 80HHC OF THE ACT. 14. LEARNED COUNSELS MAIN CONTENTION IS THAT THE I SSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY HONBLE JURISDICTIONAL HIGH COURTS JUDGMENT IN THE CASE OF CIT VS BANGALORE CLOTHING CO., 260 ITR 371. HOWEVER, IN THE RECENT JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS DRESSER RAND INDIA (2010-TIOL-281-HC-MUM-IT), THEIR LORDSHI PS HAVE OBSERVED THAT IN BANGALORE CLOTHING CASE (260 ITR 371) IT WA S HELD THAT IF AN ITEM OF ITA NO. 6871 & 6872/MUM/2007 ITA NO.6834/MUM./2007 A.Y : 01-02, 04-05 AND 04-05 PAGE 7 OF 15 INCOME IS CLOSELY LINKED WITH BUSINESS OPERATIONS A ND CONSTITUTES OPERATIONAL INCOME, IT CANNOT BE EXCLUDED UNDER E XPLANATION (BAA) TO S. 80HHC BUT THE SAID PROPOSITION IS INCONSISTENT WI TH THE LAW LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF RAVINDRANATHAN NAIR (295 ITR 228) AND IS, THEREFORE, NO LONGER GOOD LAW. THE SUBMISSI ON THAT BANGALORE CLOTHING WAS IMPLIEDLY APPROVED IN BABY MARINE EXPO RTS 290 ITR 323 (SC) WAS REJECTED BY THE HONBLE HIGH COURT ON THE GROUN D THAT JUDGMENT TURNED ON THE FACT THAT THE EXPORT HOUSE PREMIUM WAS AN IN TEGRAL PART OF THE CONSIDERATION FOR THE SALE REALIZED BY THE ASSESSEE , A SUPPORTING MANUFACTURER. THE VERY FOUNDATION OF LEARNED COUNSE LS ARGUMENT IS THUS NO LONGER SUSTAINABLE IN LAW. WE REJECT THE SAME AND D ECLINE TO INTERFERE IN THE MATTER. 15. GROUND NO. 2 IS DISMISSED. 16. IN GROUND NO.3, THE ASSESSEE HAS RAISED FOLLOWI NG GRIEVANCE:- 3. THE LEARNED INCOME TAX OFFICER HAS ERRED IN NOT ALLOWING REDUCTION OF 10% OF EXPORT INCENTIVES, DUTY DRAWBAC K, ETC., AND OF THE EXCISE DUTY REFUND FROM THE TOTAL INDIRECT C OST WHILE COMPUTING THE INDIRECT COST ATTRIBUTABLE TO EXPORT OF TRADING GOODS. AS THE SAME IS CORRECTLY CLAIMED BY THE ASSE SSEE, IT MAY BE GRANTED AS CLAIMED BY THE ASSESSEE. 17. LEARNED REPRESENTATIVES AGREE BEFORE US THAT TH IS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY HONBLE SUPREME COURT S JUDGMENT IN THE ITA NO. 6871 & 6872/MUM/2007 ITA NO.6834/MUM./2007 A.Y : 01-02, 04-05 AND 04-05 PAGE 8 OF 15 CASE OF HERO EXPORTS VS CIT (295 ITR 454), WHEREIN IT IS HELD THAT THE ENTIRE INDIRECT COSTS CANNOT BE ATTRIBUTED TO EXPOR T OF TRADING GOODS AND A PART THEREOF, WHICH MUST BE TAKEN AT 10% OF SUCH RE CEIPTS AND THAT IS THE STANDARD APPLIED BY THE LEGISLATURE, SHOULD BE ATTR IBUTED TO ACTIVITIES GIVING RISE TO RECEIPTS OTHER THAN RECEIPTS BY WAY OF EXPORT OF TRADING GOODS, IS TO BE UPHELD. RESPECTFULLY FOLLOWING ESTE EMED VIEWS OF HONBLE SUPREME COURT, WE SET ASIDE THE IMPUGNED ORDER OF T HE LEARNED CIT(A) AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 18. GROUND NO. 3 IS THUS ALLOWED. 19. IN GROUND NO.4, THE ASSESSEE HAS RAISED FOLLOWI NG GRIEVANCE:- 4. THE LEARNED INCOME TAX OFFICER HAS ERRED IN NOT CONSIDERING THE PROFITS IN RESPECT OF THE EXPORT OR IENTED UNIT FOR THE PURPOSE OF CLAIM OF DEDUCTION U/S 80HHC OF THE ACT. 20. THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT WI TH TO PRESS THIS GROUND BEFORE US, AS IT IS COVERED AGAINST THE ASSE SSEE, AND, HENCE, THE SAME IS DISMISSED AS SUCH. 21. IN GROUND NO.5, THE ASSESSEE HAS RAISED FOLLOWI NG GRIEVANCE:- ITA NO. 6871 & 6872/MUM/2007 ITA NO.6834/MUM./2007 A.Y : 01-02, 04-05 AND 04-05 PAGE 9 OF 15 5. THE LEARNED INCOME TAX OFFICER HAS ERRED IN RES TRICTING THE DEDUCTION U/S 10B TO 90% OF THE PROFITS DERIVED BY THE UNDERTAKING FROM THE EXPORT OF SUCH ARTICLES OR THI NGS OR COMPUTER SOFTWARE. 22. LEARNED COUNSEL FOR THE ASSESSEE DID NOT WISH T O PRESS THIS GROUND BEFORE US. CONSEQUENTLY, THIS GROUND OF APPEAL IS D ISMISSED AS NOT PRESSED . 23. INSOFAR AS THE GROUND NO.6 IS CONCERNED, THE FO LLOWING GRIEVANCE IS RAISED:- 6. THE LEARNED INCOME TAX OFFICER HAS ERRED IN NO T ADDING RS.2,28,00,563/- BEING PROFITS ON EOU FOR ARRIVING AT ADJUSTMENTS PROFITS FOR DEDUCTION U/S 80HHC OF THE ACT. 24. THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT WI TH TO PRESS THIS GROUND BEFORE US, AS IT IS COVERED AGAINST THE ASSE SSEE, AND, HENCE, THE SAME IS DISMISSED AS SUCH. ITA NO. 6871 & 6872/MUM/2007 ITA NO.6834/MUM./2007 A.Y : 01-02, 04-05 AND 04-05 PAGE 10 OF 15 25. IN GROUND NO.7, THE GRIEVANCE OF THE ASSESSEE I S AS UNDER:- 7. THE LEARNED INCOME TAX OFFICER HAS ERRED IN RED UCING SALES IN RESPECT OF ITEMS SHIPPED AFTER 31.3.2004, BUT BILLED BEFORE 31.3.2004, OF RS.1,39,60,013/- FROM EXPORT T URNOVER. THE SAME HAS NOT BEEN REDUCED FROM TOTAL TURNOVER AS TH E SAME IS TREATED AS LOCAL TURNOVER BY THE INCOME TAX OFFICER . 26. LEARNED COUNSEL POINTS OUT THAT SIMILAR ISSUE W AS DECIDED IN FAVOUR OF THE ASSESSEE BY THE CIT(A) IN THE ASSESSMENT YEA R 2000-01 AND THAT THE ORDER OF THE CIT(A) WAS NOT CHALLENGED BY THE ASSES SING OFFICER IN FURTHER APPEAL. IN ANY EVENT, IT IS DIFFICULT TO UNDERSTAN D AS TO HOW A EXPORT SHIPMENT IN TRANSIT CAN BE TREATED AS DOMESTIC TURN OVER FOR THE PURPOSES OF SECTION 80 HHC. WHEN SHIPMENT HAS NOT TAKEN PLAC E, THE GOODS UNDER SHIPMENT CONTINUES TO BE A PART OF STOCK OF THE ASS ESSEE AND IT IS TO BE ENTIRELY IGNORED FOR THE PURPOSES OF COMPUTING PROF ITS. HOWEVER, FOR THE SAKE OF CONSISTENCY IN TREATMENT OF THESE ENTRIES W HICH AFFECT MORE THAN ONE YEAR, WE DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE MATTER AFRESH AND C ONSISTENT TO THE TREATMENT GIVEN IN THE OTHER YEARS. WITH THESE DIRE CTIONS, THE MATTER STANDS RESTORED TO THE FILE OF THE ASSESSING OFFICE R. 27. GROUND NO. 7 IS THUS ALLOWED FOR STATISTICAL PU RPOSES IN THE TERMS INDICATED ABOVE. ITA NO. 6871 & 6872/MUM/2007 ITA NO.6834/MUM./2007 A.Y : 01-02, 04-05 AND 04-05 PAGE 11 OF 15 28. IN GROUND NO.8, THE GRIEVANCE OF THE ASSESSEE I S AS FOLLOWS:- 8. THE INCOME TAX OFFICER HAS ERRED IN REDUCING 90 % OF THE FOLLOWING RECEIPTS FROM THE PROFITS OF THE BUSINESS TO ARRIVE AT PROFITS AVAILABLE FOR DEDUCTION U/S 80HHC. A) INTEREST RECEIVED FROM CUSTOMERS RS.46,262/- B) DIVIDEND RECEIVED RS.50,539/- AS THE SAME ARE BUSINESS INCOME AND HENCE THEY ARE NOT TO BE REDUCED. 29. LEARNED COUNSEL FAIRLY SUBMITS THAT THE ABOVE I SSUES ARE COVERED AGAINST THE ASSESSEE BY TRIBUNALS ORDERS FOR THE A SSESSMENT YEARS 2000- 01 AND 2001-02 WHEREIN THESE ISSUES WERE NOT PRESSE D, AND ALSO BY SPECIAL BENCH DECISION IN THE CASE OF NIRMA INDUSTR IES (95 ITD 199). IN THIS VIEW OF THE MATTER, THIS GROUND IS ALSO DISMIS SED AS NOT PRESSED. 30. GROUND NO. 8 IS NOT PRESSED. 31. IN GROUND NO.9, THE GRIEVANCE OF THE ASSESSEE I S AS FOLLOWS:- 9. THE LEARNED INCOME TAX OFFICER HAS ERRED IN CH ARGING INTEREST U/S 234B OF RS.4,17,360/- AND 234D OF RS.1 ,84,150/- ITA NO. 6871 & 6872/MUM/2007 ITA NO.6834/MUM./2007 A.Y : 01-02, 04-05 AND 04-05 PAGE 12 OF 15 WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE THE SAME BE DELETED. 32. THE RELIEF SOUGHT IS CONSEQUENTIAL IN NATURE, T HEREFORE, WE ARE NOT REQUIRED TO ADJUDICATE UPON THIS ISSUE SEPARATELY. THE ASSESSEE WILL GET CONSEQUENTIAL RELIEF, IF ANY. 33. IN THE RESULT, THIS ASSESSEES APPEAL IS PARTL Y ALLOWED IN THE TERMS INDICATED ABOVE. 34. NOW, WE TAKE UP REVENUES APPEAL IN ITA NO.6834 /MUM./2007, FOR ASSESSMENT YEAR 2004-05. 35. IN GROUND NO.1, THE REVENUE HAS RAISED FOLLOWIN G GRIEVANCE:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE A.O. TO REDUCE PROCESSING CHARGES RECEIVED, SALE OF EXPORT LICENSE , TURNOVER OF EOU UNIT, SUNDRY CREDITORS WRITTEN BACK, DOUBTFUL D EBTS RECOVERED AND IMPORT EXCHANGE DIFFERENCE FROM THE T OTAL TURNOVER FOR THE PURPOSE OF COMPUTING DEDUCTION U/S 80HHC OF THE I.T. ACT, 1961. 36. INSOFAR AS THE ISSUE REGARDING PROCESSING CHARG ES RECEIVED BY THE ASSESSEE IS CONCERNED, THIS ISSUE HAS BEEN DISCUSSE D EARLIER IN THE ORDER ITA NO. 6871 & 6872/MUM/2007 ITA NO.6834/MUM./2007 A.Y : 01-02, 04-05 AND 04-05 PAGE 13 OF 15 ABOVE, AND, FOLLOWING HONBLE BOMBAY HIGH COURT JUD GMENT IN THE CASE OF DRESSER RAND (SUPRA), WE UPHOLD THE GRIEVANCE OF TH E ASSESSING OFFICER. 37. AS REGARDS THE ISSUE OF SALE OF EXPORT LICENSE IS CONCERNED, THIS ISSUE IS COVERED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE BY THE DECISION OF THIS TRIBUNAL IN ASSESSEE OWN CASE, IN THE APPEAL FILED BY THE REVENUE FOR ASSESSMENT YEARS 2000-01 AND 2001-02, W HEREIN, THE TRIBUNAL, RELYING ON THE ORDER OF THE HONBLE SUPRE ME COURT IN THE CASE OF CIT VS STERLING FOODS, ITR 579 (SC), ALLOWED THE G ROUND OF APPEAL OF THE REVENUE. WE, RESPECTFULLY, FOLLOWING THE SAID DECIS ION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2000-01 AN D 2001-02, CONFIRM THE ORDER OF THE LD. CIT(A). THUS, REVENUE SUCCEEDS ON THIS GROUND. 38. AS REGARDS THE ISSUE OF TURNOVER OF EOU UNIT, T HE LEARNED COUNSEL CONCEDES THAT THIS ISSUE IS COVERED AGAINST THE ASS ESSEE. 39. WITH REGARD TO ISSUES RELATING TO SUNDRY CREDIT ORS WRITTEN BACK, DOUBTFUL DEBT RECOVERED AND IMPORT EXCHANGE DIFFERE NCE, WE FIND THAT THESE ISSUES ARE COVERED BY THE DECISION OF THIS TR IBUNAL DECIDED IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 1999-2000, IN THE APPEALS FILED BY THE REVENUE, WHEREIN THE TRIBUNAL UPHELD THE ORD ER OF THE LD. CIT(A) HOLDING THAT THESE ARE PART OF BUSINESS INCOME AND NOT COVERED BY CLAUSE (BAA) OF SECTION 80HHC OF THE ACT AND IS COVERED AG AINST THE ASSESSEE BY THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN ASS ESSEES OWN CASE FOR THE ASSESSMENT YEAR 1997-98. WE, CONSEQUENTLY, RESP ECTFULLY FOLLOWING THE AFORESAID DECISIONS OF THIS TRIBUNAL, UPHOLD TH E ORDER SO PASSED BY THE LD. CIT(A) ON THESE ISSUES. ITA NO. 6871 & 6872/MUM/2007 ITA NO.6834/MUM./2007 A.Y : 01-02, 04-05 AND 04-05 PAGE 14 OF 15 40. IN THE RESULT, REVENUES APPEAL IS ALLOWED. 41. TO SUM UP, ITA NO.6871/MUM./2007 FILED BY THE A SSESSEE IS PARTLY ALLOWED, ITA NO.6872/MUM./2007 FILED BY THE ASSESSE E IS PARTLY ALLOWED, AND ITA NO.6834/MUM./2007 FILED BY THE REVENUE IS D ISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF JULY 2010. SD/XX SD/XX (D. K. AGARWAL) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; 23 RD DAY OF JULY 2010. COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX, MUMBAI 4. COMMISSIONER (APPEALS) , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, J BENCH, ITAT, MUMB AI 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR PRADEEP J. CHOWDHURY INCOME TAX APPELLATE TRIBUNAL SR. PRIVATE SECRETARY MUMBAI BENCHES, MUMBAI ITA NO. 6871 & 6872/MUM/2007 ITA NO.6834/MUM./2007 A.Y : 01-02, 04-05 AND 04-05 PAGE 15 OF 15 DATE INITIAL 1. DRAFT DICTATED ON 15.7.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 19.7.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 19.7.2010 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 19.7.2010 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 23.7.2010 SR.PS/PS 6. DATE OF PRONOUNCEMENT 23.7.2010 SR.PS 7. FILE SENT TO THE BENCH CLERK 23.7.2010 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER