COMMISSIONER OF INCOME TAX SALEM Vs. B DESRAJ

JUDGEMENT

(1.) THIS appeal is filed under Section 260a of the Income Tax Act, 1961 by the Revenue against the order of the Income Tax Appellate Tribunal, Madras, 'a' Bench dated 06. 02. 2003 passed in I. T. A. No. 2320/mds/94. On 15. 10. 2003, this Court admitted the appeal and formulated the following substantial question of law.

(2.) THE facts leading to the above substantial question of law are as under: the assessee is an 100% Export Oriented Unit. The relevant assessment year is 1991-92 and the corresponding accounting year ended on 31. 03. 1991. The assessee filed Return of income on 30. 11. 1992 admitting a total income of Rs. 1,50,860/ -. The Return was processed under Section 143 (1) (a) of the Income-tax Act (hereinafter referred to as the "act"), after making prima facie adjustment and rejecting the assessee's claim of deduction under Section 80hhc of the Act. Later, assessment was taken up for scrutiny and the assessment was completed under Section 143 (3) of the Act determining a total income of Rs. 9,27,500/ -. While completing the assessment, the Assessing Officer was of the view that the assessee is not entitled to deduction under Section 80hhc of the Act, on the ground that there was no export during the year. Aggrieved by the order, the assessee filed an appeal to the Commissioner of Income-tax (Appeals ). The C. I. T. (A) allowed the appeal and set aside the order of the lower authority. Aggrieved, the Revenue filed an appeal to the Income-tax Appellate Tribunal (hereinafter referred to as the "tribunal" ). The Tribunal dismissed the Revenue's appeal and confirmed the order of the C. I. T. (A ).

(3.) LEARNED Standing Counsel appearing for the Revenue submitted that the assessee had not done any export and therefore, the assessee is not entitled for deduction. He further submitted that on a mere receipt of the duty drawback and cash compensatory support during the accounting year does not entitle the assessee for deduction as there was no export made by the assessee during the accounting year. Further it is submitted that the amounts received could not be considered as profit derived from export. He relied on the Supreme Court judgment reported in 237 ITR 579, in the case of Commissioner of Income-tax Vs. Sterling Foods.