COMMISSIONER OF INCOME TAX Vs. INDIA PISTONS LIMITED

JUDGEMENT

(1.) THE above tax case appeals are directed against the common order of the Income-tax Appellate Tribunal in ITA Nos. 247, 1038, 435 and 1157/ Mds/99, dated 15. 03. 2005.

(2.) THE Revenue is the appellant. The assessee is a manufacturer of pistons for automobiles and other stationary engines. The assessee filed returns of income for the assessment years 1995-96 and 1996-97, wherein the assessee claimed inter alia, deduction under Section 80 HHC of the Income Tax Act (herein after referred to as 'the Act') in respect of its income from exports, deduction in respect of interest on foreign bills (for 1995-96 only), and deduction of customs duty from closing stock. The assessing officer found that the assessee had excluded the sales tax and excise duty from the total turnover for the purpose of computation of deduction under Section 80hhc of the Act and accordingly he re-computed the total turnover including these elements. The assessing officer also disallowed the interest on foreign bills under Section 40 (a) (i) as no tax was deducted at source, and included the value of customs duty into the valuation of closing stock. Hence, the assessee filed appeals before the Commissioner of Income-tax (Appeals), who allowed the appeals in favour of the Revenue with regard to the issue inclusion of sales tax and excise duty in the total turnover for the purpose of 80hhc and other two issues in favour of the assessee. On appeals, at the instance of the Revenue as well as by the assessee, the Income Tax Appellate Tribunal dismissed the appeals filed by the Revenue by following its own earlier orders in ITA 1044/mds/98 and allowed the appeals filed by the assessee.

(3.) AGGRIEVED by the same, the Revenue has preferred the above appeals raising the following substantial questions of law: