COMMISSIONER OF INCOME TAX Vs. LATHIA BROTHERS

JUDGEMENT

(1.) BEING aggrieved and dissatisfied with the impugned judgment and order passed by the Income Tax Appellate Tribunal, Ahmedabad Bench 'D' (hereinafter referred to as 'the Tribunal') dated 29.04.2005 in ITA No. 793/Ahd/2004 for the Assessment Year 2001 -02, the revenue has preferred the present Tax Appeals for consideration of the following substantial question of law:

(2.) THE assessee is a partnership firm engaged in the business of import, export and manufacturing of diamonds. During the year under consideration, the assessee has shown gross profit @10.34% on total sales as against gross profit at 12.63% shown in the preceding year. The Assessing Officer held that amount of exchange rate difference related to the debtors of last year should be deducted from the export turnover as also 90% of the same should be excluded from the business profit for the purpose of calculation of deduction u/s 80HHC. On appeal the CIT (Appeals) dismissed the appeal filed by the assessee.

(3.) ON appeal before the Tribunal by the assessee, by impugned judgment and order, Tribunal while partly allowing the appeal, directed the Assessing Officer to re -compute the deduction of the assessee by including the amount in question as part of export turnover.