COMMISSIONER OF INCOME TAX Vs. AUTO IGNITION LTD.

JUDGEMENT

(1.) THE CIT(A) has, relying upon an order passed by the Tribunal (sic) in the case of CIT vs. Sudarshan Chemicals Industries Ltd. (2000) 163 CTR (Bom) 596 : (2000) 245 ITR 769 (Bom), held that sales -tax and excise duty did not form part of the total turnover of the assessee in the context of the deductions admissible under s. 80HHC of the IT Act, 1961. A similar view appears to have been taken by the High Courts of Calcutta, Karnataka and Madras in CIT vs. Chloride India Ltd. (2002) 178 CTR (Cal) 432 : (2002) 256 ITR 625 (Cal), CIT vs. Bharat Earth Movers Ltd. (2004) 188 CTR (Kar) 488 : (2004) 268 ITR 232 (Kar) and CIT vs. Wheels India Ltd. (2005) 197 CTR (Mad) 284 : (2005) 275 ITR 319 (Mad), respectively.

(2.) MR . Goel, learned counsel for the Revenue did not, therefore, seriously dispute the proposition that sales -tax and excise duty cannot form part of the total turnover of an assessee for purposes of deductions under the provisions mentioned above. What he argued was that there was no evidence in the present case before the AO or the appellate authorities below to show that the assessee's turnover of Rs. 23,93,86,360 did include the component of excise duty and sales -tax. In the absence of any evidence, argued Mr. Goel, the deductions of excise duty and sales -tax from the said turnover were legally impermissible.

(3.) THERE is, in our view, no merit in the submission of the learned counsel. A reading of the order passed by the AO would show that the assessee had, during the course of the assessment proceedings, in writing claimed that the turnover figure as per P&L a/c for the year 1994 -95 included the excise duty of Rs. 2,41,19,042 and sales -tax of Rs. 49,07,992. This amount had, therefore, to be deducted out of the total turnover while granting deduction under s. 80HHC. The CIT(A) and the Tribunal have, in that view, correctly followed the decision in Sudarshan Chemicals Industries Ltd.'s case (supra) and granted deduction under s. 80HHC after excluding from the turnover, the component of sales -tax and excise duty paid by the assessee. No substantial question of law arises for consideration. Dismissed.