TANNA EXPORTS Vs. KAMAT M G

JUDGEMENT

(1.) THE 1st petitioner is engaged in the business of export of various commodities from India. In addition, the 1st petitioner also deals in silver. The petitioners also earn income by way of interest on advances made by them to other parties. For the asst. year 1989 90 the petitioners claimed a deduction under S. 80HHC and calculated the same in accordance with S. 80HHC(3), as it stood at the relevant time. Under S. 80HHC(3)(b), as it stood at the relevant time, for the purposes of sub s. (1), profits derived from the export of goods or merchandise out of India shall be,

(2.) IN the assessment proceedings, however, the 1st respondent has deducted from the total profits, the profits earned by the petitioners from their business of dealing in silver and interest received on account of advances made by them. In respect of this assessment the appeal of the petitioners is still pending before the Tribunal. The petitioners have prayed that pending the disposal of this appeal, the demand raised by the respondents for the asst. year 1989 90 be kept in abeyance. Under the interim order which was passed in this petition on 1st July, 1991 the respondents stated that they will not take any steps to recover the demand of Rs. 13,82,941 for the asst. year 1989 90, till the disposal of this petition, provided the petitioner No. 1 pays Rs. 3 lakhs in respect of the demand for asst. year 1989 90. The petitioners have accordingly paid Rs. 3 lakhs. In view of this and in view of the somewhat surprising nature of the calculations made by the respondents under S. 80HHC(3)(b), the demand of Rs. 13,82,941 is stayed till the disposal of the appeal.

(3.) IN view of the ratio of the judgment by a Division Bench of this Court, to which one of us (Mrs. Sujata Manohar, J.) was a party, in the case of Khatau Junkar Ltd. & Anr. vs. K.S. Pathania & Anr. reported in (1992) 102 CTR (Bom) 194 : (1992) 196 ITR 55 (Bom) such recalculation of adjustment under S. 80HHC is not permissible under S. 143(1)(a). Hence, the intimation dt. 21st March, 1991, Exhibit 'J' to the petition is set aside. The respondents are directed to prepare and forward a fresh intimation under S. 143(1)(a) in accordance with law and in the light of the above judgment. If any refund is found due as a result of the fresh intimation, the same to be adjusted against the demand for asst. year 1989 90, subject to the final orders in appeal for asst. year 1989 90. Rule is made absolute accordingly. No order as to costs.