PARRY AGRO INDUSTRIES LTD. Vs. JT. CIT

JUDGEMENT

(1.) THE above appeals relate to the assessment years 1989 -90, 1990 -91 and 1991 -92. Since common issues are considered by the Tribunal for all the three years, we deem it appropriate that the matters are disposed of together, though they were heard separately, however, on the same day. IT Appeal Nos. 151 of 2000 and 177 of 2000 are with respect to the assessment year 1989 -90, IT Appeal Nos. 128 of 2000 and 175 of 2000 arise from the year 1990 -91 and IT Appeal No. 207 of 2000 for the year 1991 -92. Essentially these appeals deal with (i) computation of profits derived from the export of goods or merchandise out of India as contemplated under s. 80HHC of the IT Act, 1961 (hereinafter referred to as "the Act"), (ii) the inclusion of interest received from fixed deposits as "business income" entitled to be deducted under section 32AB and (iii) the disallowance under section 37(3) of the income claimed as expenditure to accommodate touring employees of the company. One solitary question also arises for the year 1989 -90, which we shall refer to shortly.

(2.) THE assessee is a company, mainly engaged in manufacture and sale of tea. It owns tea estates at Anamalai, South India and Deckiajuli in the State of Assam. The assessee has been assessed for income of the business carried on at both these places by the respondent. For the year 1989 -90 while completing the assessment under section 143(2), the AO made some disallowances. We are concerned only with the disallowances referred to above under section 80HHC, section 32AB and section 37(3) of the Act. The major disallowance was with respect to the claim under se4ction 80HHC.

(3.) THE simple formula, hence, was Export Turnover/Total Turnover X Business Turnover (sic - -profits) = Available Deduction. The assessee claimed that the total turnover, i.e., the denominator in the above formula, should be that of the Assam unit alone, since only the tea obtained from the estate at Assam were exported. The AO, however, took the stand that the denominator should be the total turnover of the assessee consisting of the business at Assam as also In South India. The AO, hence, rejected the contentions of the assessee and computed the deduction under section 80HHC as proposed.