V.STANLEY PAULUS V. DEPUTY COMMISSIONER OF INCOME TAX

WA/1709/2008

AI Insights

The case involves V. Stanely Paulus, the appellant, who contested the reduction in his claim of export profit deduction under Section 80HHC of the Income Tax Act. The reduction was initially made by the Assessing Officer under Section 143(1)(a) due to the inclusion of export turnover that was not received in convertible foreign exchange within six months from the end of the financial year. The appellant's revision to the Commissioner and subsequent challenge in the High Court were unsuccessful, leading to this Writ Appeal. The court's decision focused on the statutory provisions governing export profit deductions and the automatic nature of interest levies on revised tax demands.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 699070 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 30-05-2012
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: P K R MENON; JOSE JOSEPH
• Assessee Lawyers: S RAJ
• Keywords: Assessment; Export Profit; Income Tax; Interest Levy; Revision
• Section: 234B; 80HHC; 264; 234C; 143(1)(a)

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 WEDNESDAY, THE 30TH DAY OF MAY 2012/9TH JYAISHTA 1934 WA.No. 1709 of 2008 ( ) ----------------------- AGAINST THE ORDER/JUDGMENT IN WPC.16181/2004 DATED 30-05-2008 APPELLANT(S)/PETITIONER;: ------------------------ V.STANELY PAULUS, S & J SALES CORPORATION, PANAVILA JUNCTION, THIRUVANANTHAPURAM BY ADV. SRI.S.ARUN RAJ RESPONDENT(S)/RESPONDENTS:: --------------------------- 1. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE II, DIVISION I, THIRUVANANTHAPURAM. 2. COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 30-05- 2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & C.K.ABDUL REHIM, JJ. .................................................................... W.A.No.1709 of 2008 .................................................................... Dated this the 30th day of May, 2012. J U D G M E N T Ramachandran Nair, J. Heard Shri.Arun Raj, learned counsel for the appellant and also learned Standing Counsel appearing for the respondents. 2. Return filed was processed by the Assessing Officer under Section 143(1)(a) of the Income Tax Act (hereinafter referred to as the Act for short), which resulted in reduction in the claim of export profit. The appellant filed revision before the Commissioner under Section 264 of the Act, which ended up in dismissal. The Commissioner's order was challenged in WP(C) before the learned Single Judge, but without success. Consequently, this Writ Appeal is filed against the judgment confirming the Commissioner's order in revision. 3. After hearing both sides and on going through the judgment and impugned orders, we do not find any justification for interference because while making claim on W.A.No.1709/2008 -2- deduction of export profit under Section 80HHC, the assessee committed a mistake by reckoning export turnover without excluding so much of the turnover that was not received in convertible foreign exchange within six months from the end of the financial year. The Assessing Officer reduced this in adjustment under Section 143(1)(a) of the Act. Consequent upon the reduction in the export profit demand went up leading to levy of interest under Sections 234B & 234C of the Act. Common revision was filed challenging part disallowance of deduction of export profit and levy of interest before the Commissioner, who dismissed the revision. Appellant's claim before the lower authorities and before the learned Single Judge was that when export turnover is reduced to the extent of the amount not received in convertible foreign exchange within the statutory period, proportionate reduction should have been granted in direct cost and indirect cost in relation to trading of goods in export. We are unable to uphold the claim because disallowance of export turnover to the extent of the amount not received in convertible foreign exchange W.A.No.1709/2008 -3- within six months from end of the financial year is the statutory provision contained under Section 80HHC(2)(a) of the Act. Expenditure both direct and indirect are incurred for export of the commodity and nothing of it is attributable to the receipt of amount through banking channels. Therefore there is no ground for allowing appellant's prayer. We, therefore do not find any merit in the challenge against the revised demand of tax. So far as interest demanded is concerned, it is rather automatic though the appellant has a right to apply for waiver. The appellant is always free to apply for waiver, and if he has not filed application for waiver, he can still file it if it is maintainable. This Writ Appeal is disposed of as above. (C.N.RAMACHANDRAN NAIR, JUDGE) (C.K.ABDUL REHIM, JUDGE) jg "