Olam Exports (India) Limited V. The Commissioner of Income Tax, Income Tax Office Trivandrum, Kerala

ITA/169/2008

AI Insights

The case involves Olam Exports (India) Limited appealing against the decision of the Income Tax Appellate Tribunal, Cochin, regarding the computation of deductions for export profits under Section 80HHC and industry deductions under Section 80IB of the Income Tax Act. The Tribunal had disallowed simultaneous deductions under Section 80IB and Section 80HHC, following the full bench decision. The High Court agreed with the Tribunal's decision on the disallowance but allowed reconsideration of the deduction under Section 80HHC in light of a Supreme Court decision, which could potentially benefit the assessee if a disclaimer certificate from the export houses is provided.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 793791 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 29-05-2009
• Assessment Year: misc
• Other Referred Cases: JANATHA CASHEW EXPORTING CO. V. CIT, 309 I.T.R.440, CIT V. SHIRKE CONSTRUCTION EQUIPMENT LTD., 291 I.T.R. 380
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: JOSEPH MARKOSE; RAJU MATHEWS
• Keywords: Income tax appeal; Export Profit Deduction; Backward Area Industry; Simultaneous Deduction Exclusion; Revised Assessment Proceedings
• Section: 80HHC; 80IB; 80IA(9); 80IB(13)

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM FRIDAY, THE 29TH MAY 2009 / 8TH JYAISHTA 1931 ITA.No. 169 of 2008() --------------------- ITA.141/COCHIN/2005 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT ----------------------------- OLAM EXPORTS (INDIA) LIMITED, BISHOP JEROME NAGAR, KOLLAM, KERALA. BY ADV. SRI.JOSEPH MARKOSE, SENIOR ADVOCATE SRI.RAJU K.MATHEWS RESPONDENT(S): --------------- THE COMMISSIONER OF INCOME TAX, INCOME TAX OFFICE TRIVANDRUM, KERALA. ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX FOR R1 THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 29/05/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & C. K. ABDUL REHIM, JJ. -------------------------------------------- I. T. Appeal No. 169 OF 2008 -------------------------------------------- Dated this the 29th day of May, 2009 JUDGMENT Ramachandran Nair,J. In the appeal filed by the assessee, the questions raised pertain to computation of deduction for export profit under Section 80HHC of the I.T. Act. The assessee having it's industry in a backward area was entitled to deduction under Section 80IB of the I.T. Act. However, by virtue of Section 80 IB (13) read with Section 80IA (9) of the Act the assessee will not be entitled to claim deductions both under Section 80IB and under Section 80HHC of the Act. Tribunal following their full bench decision upheld the disallowance under Section 80IB(13) of the Act, but granted deduction under Section 80HHC of the Act. Even though senior counsel appearing for the assessee contended that deduction under Section 80HHC is a full code by itself and no exclusion would be made while computing eligible deduction, we notice that Section 80IB and under Section 80HHC come under Chapter VIA and by virtue of specific exclusion under Section 80IB 2 (13) of the Act the assessee is not entitled to simultaneous deduction of both. In other words, while computing deduction under Section 80HHC deduction granted under Section 80IB cannot be reckoned or has to be excluded. We find the order of the Tribunal is consistent with the statutory provisions and therefore appeal on this issue is rejected. 2. So far as computation of relief under Section 80HHC is concerned, we find that assessment requires reconsideration because by virtue of the decision of the Supreme Court in JANATHA CASHEW EXPORTING CO. V. CIT, 309 I.T.R.440 the assessee is entitled to deduction of export profit arising from export of goods made through export Houses the assessee acting as supporting manufacturer. However, it is on condition of availability of disclaimer certificate issued by the Export Houses. It is for the assessee to produce disclaimer certificate in revised assessment proceedings before the officer. So far as assessee's claim for determination of deduction before excluding carry forward or set-off loss is concerned, the decision of the Supreme Court in CIT V. SHIRKE CONSTRUCTION EQUIPMENT LTD., 291 I.T.R. 380 is against the proposition 3 canvassed by the assessee. Therefore assessment on this does not warrant any modification. Appeal is consequently disposed of partly allowing the claim and directing the assessing officer to re work relief under Section 80HHC in terms of the decision above referred after giving an opportunity of hearing to the assessee, (C.N.RAMACHANDRAN NAIR) Judge. (C. K. ABDUL REHIM) Judge. kk 4 "