The DCIT, Circle-5, Baroda V. M/s. Lens &Spects, Baroda

ITA 687/AHD/2005

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9148 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 28-08-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 04-03-2005
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C
• Keywords: Depreciation; Retrospective amendment; Competent authority
• Section: 80HHC; 80HH; 143(2); 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI H.L. KARWA, JUDICIAL MEMBER AND SHRI A.N.PAHUJA, ACCOUNTANT MEMBER ITA NO.687/AHD/2005 & CO NO.104/AHD/2005 ASSESSMENT YEAR:2001-02 DATE OF HEARING:28.8.09 DRAFTED:1.9.09 DY. COMMISSIONER OF INCOME TAX, CIRCLE-5, BARODA M/S. LENS & SPECTS CHASMAWALA HOUSE, B/H VIHAR TALKIES, PRATAPNAGAR ROAD, BARODA V/S . V/S . M/S. LENS & SPECTS, CHASMAWALA HOUSE, PRATAP NAGASR ROAD, B/H. VIHAR TALKIES, BARODA [PAN:.AAAFL9258P] DCIT, CIRCLE-5, BARODA (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- MS. URVASHI SHODHAN, AR REVENUE BY:- SHRI M.C. PANDIT, DR O R D E R A.N.PAHUJA: THIS APPEAL BY THE REVENUE AND CROSS-OBJECTION (CO ) BY THE ASSESSEE AGAINST AN ORDER DATED 10.12.2004 OF THE L D. CIT(APPEALS)-II, BARODA, RAISE THE FOLLOWING GROUNDS:- ITA NO.687/AHD/2005 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN LAW IN DIRECTING THE AO TO ALLOW DEDUCTION U/S.80HH C IN RESPECT OF THE SALE OF DUTY ENTITLEMENT PASS BOOK (DEPB) CREDITS AMOUNTING TO RS.5,78,029/-, DESPITE THE SAME NOT BEING COVERED BY THE PROVISO T O SECTION 80HHC(3) READ WITH CLAUSE (IIIA), (IIIB) AND (IIIC) OF SECTION 28 OF THE INCOME-TAX ACT. 2. THE LD. CIT(A) ERRED IN TREATING THE SALE OF DEP B CREDITS AS COVERED BY SECTION 28(IIIA), DISREGARDING THE FACT THAT THIS P ROVISION SPECIFICALLY AND EXCLUSIVELY REFERS TO THE SALE OF A LICENCE GRANTED UNDER THE IMPORTS (CONTROL) ORDER, 1955, MADE UNDER THE IMPORTS AND EXPORTS (CO NTROL) ACT, 1947 AND ITA NO.687/AHD/2005 & CO 104/AHD/2005 A.Y. 2001-02 DCIT CIR-5 BARODA V. M/S. LENS & SPECTS PAGE 2 DOES NOT ADMIT ANY INTERPRETATION SO AS TO INCLUDE ANY OTHER RECEIPT WITHIN ITS AMBIT. 3(A) THE LD. CIT(A) ERRED IN DISREGARDING THE PRINC IPLE THAT RULES OF INTERPRETATION WOULD COME INTO PLAY ONLY IF THERE I S ANY DOUBT WITH REGARD TO THE EXPRESS LANGUAGE USED IN THE PROVISION AND, IF THE WORDS USED ARE UNEQUIVOCAL, THERE IS NO SCOPE OF IMPORTING THE RUL E OF LIBERAL INTERPRETATION OF AN INCENTIVE PROVISION, THEREBY CONTRAVENING THE RA TIO OF THE SUPREME COURT DECISIONS IN THE CASE PANDIAN CHEMICALS LTD. VS. CI T 262 ITR 278 (SC) AND IPCL LABORATORIES VS. DCIT 266 ITR 521 (SC), THE LA TTER BEING SPECIFICALLY IN RELATION TO SECTION 80HHC. 3(B) THE LD. CIT FURTHER ERRED IN DISREGARDING THE SETTLED RATIO REITERATED IN THE SUPREME COURT DECISION IN THE CASE OF KARMACHARI UN ION VS. UNION OF INDIA 243 ITR 143 (SC) THAT EQUITY OR HARDSHIP ARE NOT RE LEVANT CONSIDERATIONS FOR INTERPRETING TAX LAWS. 3.(C) WITHOUT PREJUDICE, THE LD. CIT(A) HAS FAILED TO TAKE NOTE OF THE INTENT OF LEGISLATURE AS REFLECTED IN THE CBDTS CIRCULAR F.N O.153/93/2004-TPL DATED 8.9.2004, CLEARLY LAYING DOWN THAT THE DEDUCTION PR OVIDED U.S. 80HHC(3) DOES NOT COVER THE PROFIT ON THE SALE OF DEPB CREDITS. 4. THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR A LTER THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. CO NO.104/AHD/2005 1. THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITIO N MADE ON ACCOUNT OF FOLLOWING DISALLOWANCE OUT OF EXPENSES: A) 1/5 OUT OF VEHCLE EXPENSES RS. 8,967/- B) 1/5 OUT OF DEPRECIATION ON VEHICLE-RS. 20,494/- C) 1/8 OUT OF TELEPHONE EXPENSES-RS.16,351/- 2. THE LD. CIT(A) ERRED IN HOLDING THAT WHILE CALC ULATING THE DEDUCTION U/S 80HHC: A) SALES TAX IS INCLUDIBLE IN TURNOVER B) THE AMOUNT OF RS. 1,02,588/- NOT BEING RECEIVED WITHIN PRESCRIBED TIME, HAS TO BE REDUCED FROM THE TOTAL AMOUNT OF EXPORT CONSIDERATI ON. 3. CROSS-OBJECTOR CRAVES LEAVE TO ADD, ALTER OR AM END ANY OF THE GROUNDS OF CROSS OBJECTION MENTIONED ABOVE. 2. FACTS, IN BRIEF, AS PER THE RELEVANT ORDERS ARE THAT THE RETURN DECLARING INCOME OF RS.5,60,670/- FILED ON 29-10-2001 BY THE ASSESSE E, MANUFACTURING AND TRADING IN OPHTHALMIC LENSES, AFTER BEING PROCESSED U/S.143(1) (A) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS TAKEN UP FOR SCRUTINY WITH THE ISSUE OF NOTICE U/S 143(2) OF THE ACT ON 25-10-2002. DURING THE CO URSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER[AO IN SHORT] NOTICED THAT THE ASSESSEE CLAIMED DEDUCTION OF ITA NO.687/AHD/2005 & CO 104/AHD/2005 A.Y. 2001-02 DCIT CIR-5 BARODA V. M/S. LENS & SPECTS PAGE 3 RS.12,60,821/-U/S.80HHC OF THE ACT IN TERMS OF REP ORT IN FORM 10CCAC.INTER ALIA, THE ASSESSEE CLAIMED THE SALE OF DEPB LICENSE AMOUN TING TO RS.5,78,029/- AS EXPORT INCENTIVE U/S.28(IIIA) OF THE ACT WHILE COMP UTING DEDUCTION U/S 80HHC OF THE ACT. HOWEVER, THE AO WAS OF THE OPINION THAT INCOME FROM SALE OF DEPB WAS NOT QUALIFIED FOR DEDUCTION U/S.80HHC OF THE ACT, THE L ICENCE HAVING NOT BEEN GRANTED UNDER THE IMPORTS (CONTROL) ORDER, 1955 AND THUS, T HE AMOUNT DID NOT FALL WITHIN THE PROVISIONS OF SEC. 28(IIIA) OF THE ACT.. 3. ON APPEAL, THE LD. CIT(APPEALS) WHILE RELYING UP ON HIS OWN DECISION DATED 05- 11-2004 IN THE CASE OF M/S RONAK OVERSEAS CO. AND D ECISION OF HONBLE SUPREME COURT IN THE CASE OF ASSOCIATED BANKING CORPORATION (I) LTD. V. CIT 56 ITR 1 (SC) DIRECTED THE AO TO ALLOW DEDUCTION U/S.80HHC(3) OF THE ACT READ WITH PROVISIONS OF SECTION 28(IIIA) OF THE ACT ON SALE OF DEPB LICENCE AMOUNT. 4. THE REVENUE IS NOW IN APPEAL AGAINST AFORESAID F INDINGS OF LD. CIT(APPEALS). AT THE OUTSET, THE LD. AR ON BEHALF OF THE ASSESSE E CONTENDED THAT DEDUCTION U/S.80HHC OF THE ACT IN RESPECT OF SALE OF DEPB LIC ENSE FOR AN AMOUNT OF RS.5,78,029/- IS TO BE COMPUTED IN TERMS OF THE 2ND PROVISO TO SEC. 80HHC(3) OF THE ACT READ WITH CLAUSE (IIID) OF SECTION 28 , INSERTE D BY THE TAXATION LAWS (SECOND AMENDMENT) ACT, 2005 WITH RETROSPECTIVE EFFECT FROM 1-4-1998. ACC ORDINGLY, IT WAS PLEADED BY THE LD. AR ON BEHALF OF THE ASSESSEE THA T THE MATTER BE RESTORED TO THE FILE OF THE AO FOR WORKING OUT DEDUCTION U/S 80HHC OF THE ACT IN TERMS OF THE SAID PROVISO. ON THE OTHER HAND, LD. DR DID NOT DISPUTE THESE SUBMISSIONS OF THE LD. AR. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THRO UGH THE FACTS OF THE CASE. WE FIND THAT AT THE TIME OF ASSESSMENT OR IN APPEAL BEFORE THE LD. CIT(A), NEITHER THE AO NOR THE LD. CIT(APPEALS) HAD BENEFIT OF THE AFORESAID 2ND PROVISO TO SEC. 80HHC(3) OF THE ACT READ WITH CLAUSE (IIID) OF SECTION 28 , INS ERTED BY THE TAXATION LAWS (SECOND AMENDMENT) ACT, 2005 WITH RETROSPECTIVE EFFECT FROM 1-4-1998. SIN CE EXPORT TURNOVER OF THE ASSESSEE IS BELOW RS.1 CRORE, THE DEDUCTION U/S 80HHC OF THE ACT ON THE PROFIT ON SALE OF DEPB LICENSE BY THE ASSESS EE IN THIS CASE IS NOW GOVERNED BY THE SECOND PROVISO TO SECTION 80HHC(3) OF THE A CT, INSERTED BY THE TAXATION LAWS (SECOND AMENDMENT) ACT 2005 W.E.F. 1.4.1998, WHICH READS AS UNDER: ITA NO.687/AHD/2005 & CO 104/AHD/2005 A.Y. 2001-02 DCIT CIR-5 BARODA V. M/S. LENS & SPECTS PAGE 4 PROVIDED FURTHER THAT IN THE CASE OF AN ASSESSEE H AVING EXPORT TURNOVER NOT EXCEEDING RUPEES TEN CRORES DURING THE PREVIOUS YEAR, THE PROFITS COMPUTED UNDER CLAUSE (A) OR CLAUSE (B) OR CLAUSE ( C) OF THIS SUB-SECTION OR AFTER GIVING EFFECT TO THE FIRST PROVISO, AS THE CASE MAY BE, SHALL BE FURTHER INCREASED BY THE AMOUNT WHICH BEARS TO NINE TY PER CENT OF ANY SUM REFERRED TO IN CLAUSE (IIID) OR CLAUSE (IIIE), AS T HE CASE MAY BE, OF SECTION 28, THE SAME PROPORTION AS THE EXPORT TURNOVER BEAR S TO THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE ASSESSEE. 5.1 ACCORDINGLY, WE HAVE NO ALTERNATIVE BUT TO V ACATE THE FINDINGS OF LD. CIT(APPEALS) AND RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTIONS TO RE-COMPUTE THE DEDUCTION U/S.80HHC OF THE ACT ON THE SALE OF DEPB LICENCE IN TERMS OF AFORESAID PROVISO. WITH THESE D IRECTIONS, GROUND NOS.1 TO 4 IN THE APPEAL OF REVENUE ARE DISPOSED OF AS INDICATED HERE INBEFORE. 6. ADVERTING NOW TO THE FIRST GROUND IN THE CO RELA TING TO DISALLOWANCE OF 1/5 TH CAR EXPENSES AND DEPRECIATION THEREON AND 1/8 TH OF TELEPHONE EXPENSES, THE AO NOTICED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT TH E ASSESSEE DEBITED MOTOR CAR EXPENSES OF RS.44,835/- INCURRED ON TWO FOUR WHEELE RS AND THREE TWO WHEELERS. SINCE THE ASSESSEE DID NOT MAINTAIN ANY LOG BOOKS F OR USE OF CARS, ACCORDINGLY, THE AO DISALLOWED 1/5 TH OF THE PATROL EXPENSES APART FROM DISALLOWANCE OF 1/5 TH OF THE DEPRECIATION ON THESE CARS . SIMILARLY OUT OF TELEP HONE EXPENSES OF RS.1,30,810/- WHICH INCLUDED EXPENSES INCURRED ON TELEPHONE INSTA LLED AT THE RESIDENCE OF THE PARTNERS, THE AO DISALLOWED 1/5 TH OF THE TELEPHONE EXPENSES FOR PERSONAL USE. 7. ON APPEAL, THE LD. CIT(APPEALS) UPHELD THE FI NDINGS OF AO IN RELATION TO DISALLOWANCE OF CAR EXPENSES AND DEPRECIATION THERE ON AND RESTRICTED THE DISALLOWANCE ON ACCOUNT OF TELEPHONE EXPENSES TO 1/ 8 TH . 8. THE ASSESSEE IN THE CO IS DISPUTING THE AFORESA ID FINDINGS OF THE LD. CIT(APPEALS). AFTER HEARING BOTH THE PARTIES, WE AR E OF THE OPINION THAT SINCE THE ASSESSEE HAS NOT DENIED THE PERSONAL USER OF TELEPH ONES AND CARS EITHER BEFORE THE LD. CIT(A) AND EVEN BEFORE US , THE LD. CIT(A) WAS JUSTIFIED IN UPHOLDING THE ACTION OF THE AO IN DISALLOWING 1/5 TH OF THE CAR EXPENSES INCLUDING DEPRECIATION THEREON , IN TERMS OF PROVISIONS OF SECTION 38(2) OF THE ACT. AS REGARDS TELEPHONE EXPENSES. SINCE THE LEARNED AR OF THE ASSESSEE DID NOT PLACE BEFORE US ANY MATERIAL IN ORDER TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER, W E ARE OF THE OPINION THAT THE ITA NO.687/AHD/2005 & CO 104/AHD/2005 A.Y. 2001-02 DCIT CIR-5 BARODA V. M/S. LENS & SPECTS PAGE 5 DISALLOWANCE RESTRICTED TO 1/8 TH OF THE TELEPHONE EXPENSES IS REASONABLE AND IN ACCORDANCE WITH LAW AND FACTS AVAILABLE ON RECORD. ACCORDINGLY, WE DECLINE TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). THER EFORE, GROUND NO.1 IN THE CO IS DISMISSED. 9. NEXT GROUND NO.2(A) IN THE CO RELATES TO INCLUS ION OF SALES TAX WHILE COMPUTING TOTAL TURNOVER FOR THE PURPOSE OF DEDUCTI ON U/S 80HHC OF THE ACT.DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICE D THAT THE ASSESSEE DID NOT INCLUDE SALES TAX IN THE TOTAL TURNOVER WHILE COMPU TING U/S.80HHC OF THE ACT. ACCORDINGLY, RELYING UPON THE DECISION DATED 24.8.2 000 OF THE ITAT IN THE CASE OF GUJARAT FLUROCHEMICALS LTD. V. JCIT(ASST.) SPL. RAN GE-3 BARODA IN ITA NO.231/AHD/2000, THE AO INCLUDED SALES TAX IN THE T OTAL TURNOVER WHILE COMPUTING DEDUCTION U/S 80HHC OF THE ACT 10. ON APPEAL THE LD. CIT(APPEALS) WHILE RELYING UP ON THE DECISION DATED 13.12.2001 OF THE ITAT IN THE CASE OF GUJRAT ALAKAL IES & CHEMICALS LTD. VS. JCIT(ASST.) SPL. RANGE-3 BARODA IN ITA NO.1188/AHD/ 2000 UPHELD THE FINDINGS OF AO . 11. THE ASSESSEE IN THE CO IS NOW DISPUTING THE F INDINGS OF LD. CIT(APPEALS). AT THE OUTSET, BOTH THE PARTIES AGREED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. LA XMI MACHINE WORKS, 290 ITR 667 (SC). 12. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. WE FIND THAT THE ISSUE OF INCLUSION OF SALES TAX I N THE TOTAL TURNOVER WHILE COMPUTING DEDUCTION U/S 80HHC OF THE ACT, IS NOW S QUARELY COVERED BY THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F CIT VS. LAXMI MACHINE WORKS, 290 ITR 667 (SC), WHEREIN IT WAS HELD AS UND ER: SECTION 80HHC OF THE INCOME-TAX ACT, 1961 IS A BEN EFICIAL SECTION: IT WAS INTENDED TO PROVIDE INCENTIVE TO PR OMOTE EXPORTS. THE INTENTION WAS TO EXEMPT PROFITS RELATABLE TO EXPORT S. JUST AS COMMISSION RECEIVED BY THE ASSESSEE IS RELATABLE TO EXPORTS AN D YET IT CANNOT FORM PART OF TURNOVER FOR THE PURPOSES OF SECTION 80HH C, EXCISE DUTY AND SALES TAX ALSO CANNOT FORM PART OF TURNOVER. JUS T AS INTEREST, COMMISSION ETC., DO NOT EMANATE FROM THE TURNOVER SO ALSO EXCISE DUTY ITA NO.687/AHD/2005 & CO 104/AHD/2005 A.Y. 2001-02 DCIT CIR-5 BARODA V. M/S. LENS & SPECTS PAGE 6 AND SALES TAX DO NOT EMANATE FROM SUCH TURNOVER. S INCE EXCISE DUTY AND SALES TAX DID NOT INVOLVE ANY SUCH TURNOVER SUC H TAXES HAD TO BE EXCLUDED. COMMISSION, INTEREST, RENT ETC. DO YIEL D PROFITS, BUT THEY DO NOT PARTAKE OF THE CHARACTER OF TURNOVER AND THEREF ORE THEY ARE NOT INCLUDIBLE IN THE TOTAL TURNOVER. IF SO, EXCISE DUTY AND SALES TAX ALSO CANNOT FORM PART OF THE TOTAL TURNOVER UNDER SECT ION 80HHC(3). ONE CANNOT INTERPRET THE WORDS TOTAL TURNOVER WIT H REFERENCE TO THE DEFINITION OF THE WORD TURNOVER IN OTHER LAWS LIK E THE CENTRAL SALES TAX OR AS DEFINED IN ACCOUNTING PRINCIPLES. EXCISE DUTY AND SALES TAX ARE INDIRECT TAXES. THEY ARE RECOVERED BY THE ASSESSEE ON BEHALF OF THE GOVERNMENT. BY THE COURT: THE PRINCIPAL REASON FOR ENACTING A F ORMULA IN SECTION 80HHC OF THE INCOME-TAX ACT, 1961 IS TO DISALLOW A PART OF THE CONCESSION THEREUNDER WHEN THE ENTIRE DEDUCTION CLA IMED CANNOT BE REGARDED AS RELATING TO EXPORTS. THEREFORE, WHILE INTERPRETING THE WORDS TOTAL TURNOVER IN THE FORMULA IN SECTION 80HHC ON E HAS TO GIVE A SCHEMATIC INTERPRETATION. THE VARIOUS AMENDMENTS M ADE THEREIN SHOW THAT RECEIPTS BY WAY OF BROKERAGE, COMMISSION, RENT , RENT ETC. DO NOT FORM PART OF BUSINESS PROFITS AS THEY HAVE NO NEXUS WITH THE ACTIVITY OF EXPORT. AMENDMENTS MADE FROM TO TIME TO TIME INDIC ATE THAT THEY BECAME NECESSARY IN ORDER TO MAKE THE FORMULA WORKA BLE. IF SO, EXCISE DUTY AND SALES TAX ALSO CANNOT FORM PART OF THE TO TAL TURNOVER UNDER SECTION 80HHC(3): OTHERWISE THE FORMULA BECOMES UNW ORKABLE. 12.1 IN THE CASE OF SONY INDIA PVT. LTD. VS. DCI T, IN ITA NO. 1181/DEL/2005 DATED 23/9/2008 FOR THE AY 2001-02 ,ITAT DELHI BENC H, FOLLOWING THE AFORESAID DECISION OF THE HONBLE SUPREME COURT DIRECTED TO EXCLUDE EXCISE DUTY WHILE WORKING OUT TOTAL TURNOVER FOR THE PURPOSE OF DEDUC TION U/S 80HHC OF THE ACT. 12.2 IN VIEW OF AFORESAID DECISION OF THE HONB LE SUPREME COURT, WE HAVE NO ALTERNATIVE BUT TO VACATE THE FINDINGS OF THE LD. CIT(A) IN DIRECTING THE AO TO INCLUDE SALES TAX WHILE WORKING OUT TOTAL TURNOVER FOR THE PURPOSE OF DEDUCTION U/S 80HHC OF THE ACT. THEREFORE, GROUND NO. 2(A) RAISED BY TH E ASSESSEE IN RELATION TO THE INCLUSION OF SALES TAX IN TOTAL TURNOVER, IN THE CO IS ALLOWED 13. GROUND NO. 2(B) IN THE CO RELATES TO REDUCTION OF RS.1,02,588/- ON ACCOUNT OF SALES PROCEEDS OF EXPORT, HAVING NOT BEEN RECEIVED WITHIN THE PRESCRIBED TIME. THE AO WHILE COMPUTING DEDUCTION U/S.80HHC OF THE ACT E XCLUDED AN AMOUNT OF RS.1,02,588/- FROM THE TOTAL EXPORT TURNOVER,THE AS SESSEE HAVING NOT RECEIVED THE ITA NO.687/AHD/2005 & CO 104/AHD/2005 A.Y. 2001-02 DCIT CIR-5 BARODA V. M/S. LENS & SPECTS PAGE 7 SAID EXPORT PROCEEDS OF BILL NO. 28/00-01 DATED 21. 9.2000 WITHIN THE STIPULATED PERIOD OF SIX MONTHS PROVIDED U/S.80HHC(2)(A) OF THE ACT. 14. ON APPEAL, THE LD. CIT(APPEALS) UPHELD THE FIND INGS OF AO IN FOLLOWING TERMS:- 4.5 I HAVE CONSIDERED THE SUBMISSIONS MADE AS WELL AS ARGUMENTS PUT FORTH BY THE LEARNED COUNSEL FOR THE APPELLANT. THE FINDI NG IN THE ASSESSMENT ORDER, ARGUMENTS OF THE AO AND REPORT ARE ALSO CONSIDERED. IT IS NOTICED THAT THE APPELLANT HAD MADE AN APPLICATION TO THE COMPETENT AUTHORITY BUT THE SAID AUTHORITY HAD NOT ALLOWED ANY EXTENSION AS COPY OF LETTER DATED 8.10.2001 FILED BY THE APPELLANT NOWHERE STATES ANY EXTENSION GRANT ED TO THE APPELLANT. THEREFORE, THE CONTENTION OF THE APPELLANT CANNOT B E ACCEPTED AT THIS STAGE THAT IT HAS RECEIVED EXTENSION OF TIME AND THE AO H AS RIGHTLY EXCLUDED SAID AMOUNT OF SALE PROCEEDS SINCE THE SAME WAS NOT REAL IZED WITHIN SIX MONTHS FROM THE END OF THE FINANCIAL YEAR AS REQUIRED UNDE R CLAUSE-A OF SUB SECTION 2 OF SEC. 80HHC. THE ACTION OF THE AO NEEDS NO INTERF ERENCE AND SAME IS UPHELD. 15. THE ASSESSEE IN THEIR CO IS NOW DISPUTING THE FINDINGS OF THE LD. CIT(APPEALS). THE LD. AR CONTENDED THAT AO MAY BE DIRECTED TO ALL OW DEDUCTION IN TERMS OF PROVISION OF SECTION 155 (13) OF THE ACT. ON THE O THER HAND, LD. DR DID NOT OPPOSE THESE SUBMISSIONS OF THE LD. AR. 16. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. WE FIND THAT NEITHER THE AO NOR THE LD. CIT(APPEALS) E XAMINED THE APPLICABILITY OF PROVISIONS OF SECTION 155(13) OF THE ACT NOR ANY S UCH PLEA APPEARS TO HAVE BEEN TAKEN BEFORE THEM. SINCE THE ASSESSEE NOW SEEKS RE COURSE TO PROVISIONS OF SEC. 155(13) OF THE ACT FOR THE PURPOSE OF DEDUCTION U/S 80HHC OF THE ACT ON THE AFORESAID AMOUNT OF RS.1,02,588/- WHILE RELEVANT MA TERIAL IS NOT AVAILABLE BEFORE US, IN THESE CIRCUMSTANCES, WE HAVE NO OPTION BUT TO V ACATE THE FINDINGS OF THE LD. CIT(APPEALS) AND RESTORE THE MATTER TO THE FILE OF AO WITH THE DIRECTIONS TO EXAMINE THE APPLICABILITY OF PROVISIONS OF SECTION 155 (13 ) OF THE ACT FOR COMPUTING DEDUCTION U/S 80HHC OF THE ACT ON THE AFORESAID AMOUNT OF RS. 1,02,588/- IN THE LIGHT OF FACTS AVAILABLE ON RECORD AND THEREAFTER, READJUDICATE TH E MATTER IN ACCORDANCE WITH LAW AFTER ALLOWING SUFFICIENT OPPORTUNITY TO THE ASSESS EE. WITH THESE DIRECTIONS ,GROUND NO. 2(B) IN THE CO IS DISPOSED OF 17. NO ADDITIONAL GROUND HAVING BEEN RAISED IN TERM S OF RESIDUARY GROUND NO.4 IN THE APPEAL OF REVENUE AND GROUND NO.3 IN THE CO, B OTH THE GROUNDS ARE DISMISSED. ITA NO.687/AHD/2005 & CO 104/AHD/2005 A.Y. 2001-02 DCIT CIR-5 BARODA V. M/S. LENS & SPECTS PAGE 8 18. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES WHILE CO IS ALLOWED, BUT PARTLY FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN OPEN COURT ON 4TH SEPTEMBER, 2009 SD/- SD/- (H.L. KARWA) (A.N.PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, DATED :4TH SEPTEMBER,2009 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. DY. COMMISSIONER OF INCOME TAX, CIRCLE-5, BAROD A 3. CIT(APPEALS)-II, BARODA 4. THE CIT CONCERNED. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD