COMMISSIONER OF INCOME-TAX Vs. ASHOK LEYLAND LTD

JUDGEMENT

(1.) THE above tax case appeal is directed against the order of the Income -tax Appellate Tribunal in I.T.A. No. 1302/Mds/2003 dated February 8, 2006.

(2.) THE Revenue is the appellant. During the relevant assessment year, the assessee's claim with respect to deduction under Section 80HHC by not considering the excise duty and sales tax receipts as part of the turnover was disallowed by the Assessing Officer. Hence, the assessee filed an appeal before the Commissioner of Income -tax (Appeals). The Commissioner (Appeals) allowed the appeal directing the Assessing Officer to exclude the excise duty and sales tax receipts from the total turnover. On appeal, at the instance of the Revenue, the Income -tax Appellate Tribunal dismissed the appeal, confirming the order of the Commissioner (Appeals).

(3.) WITH respect to the question whether the excise duty and sales tax is not includible in the turnover while calculating the deduction under Section 80HHC, this court in CIT v. Wheels India Ltd. : [2005]275ITR319(Mad) and CIT v. Sundaram Fasteners Ltd. : [2005]272ITR652(Mad) , which were followed by this court in CIT v. India Pistons Ltd. : [2006]282ITR632(Mad) , wherein it is held that it is highly impossible to accept the contention that the term 'turnover' would include the excise duty and sales tax components which are all indirect taxes and which the assessee has to collect and pay over to the Government and such statutory dues will not have any element of profit of business and, therefore, the sales tax and excise duty are not to be included in the total turnover while computing the deduction under Section 80HHC.