(Per : HONOURABLE MR.
JUSTICE AKIL KURESHI)
1. In these appeals, the revenue has called in question a common judgment of the Income Tax Appellate Tribunal dated 17-8-2009. The respondent assessee is common in all the appeals. The issue involved is identical, however, pertaining to different assessment years and representing slightly different amounts. For the purpose of this order, therefore, we may record facts as arising in Tax Appeal No.2471/2009.
2. In this appeal pertaining to the assessment year 1998-99, the revenue has framed the following question for our consideration:-
"Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by CIT(A) in deleting the disallowance of Rs.70,00,000/- made on account of unexplained cash credit u/s.68?"
3. The issue arises in the following factual background. The respondent assessee is a manufacturer exporter. During the previous year relevant to the assessment year under consideration, the assessee claimed certain benefits under section 80HHC of the Income Tax Act, 1961 ('the Act', for short) which included an amount of Rs.70 lakhs which according to the assessee, represented its export sale. The Assessing Officer however on the strength of investigation carried out by the Director of Revenue Intelligence, came to the conclusion that no such sales were ever made. In fact, the assessee and other entities had connived to claim bogus benefits on the basis of exports not genuinely made in a surreptitious manner to claim other tax benefits such as DEPB remissions including deductions under section 80HHC of the Act. While, therefore, denying such benefit of deduction under section 80HHC of the Act, the Assessing Officer simultaneously held that such amount of Rs.70 lakhs would represent the unexplained cash credit of the assessee and he accordingly decided to tax the same under section 68 of the Act. In the order dated 26-3-2004 which the Assessing Officer had passed, he held that the export turnover eligible for deduction under section 80HHC is reduced from Rs.585.91 crores to Rs.585.21 crores. In other words, the Assessing Officer disallowed the assessee's claim for deduction under section 80HHC of the Act by the said amount of Rs.70 lakhs.
4. The assessee carried the issue in appeal. The Commissioner (Appeals) vide his order dated 22-12-2004 allowed the appeal. He upheld the assessee's contention that the addition of Rs.70 lakhs in respect of bogus exports was not justified. He, in fact, held that there was no cogent evidence in possession of the Assessing Officer to hold that such sales were bogus. The C.I.T. (Appeals) on facts thus reversed the finding of the Assessing Officer that the amount of Rs.70 lakhs represented bogus sales of the assessee. He, therefore, while deleting the additions under section 68 of the Act, further directed granting of deduction under section 80HHC of the Act with respect to such amount also.
5. Revenue carried the matter in appeal before the Tribunal. The Tribunal did not address the question of correctness of the C.I.T. (Appeals)'s conclusion that amount of Rs.70 lakhs represented the genuine export sale of the assessee. The Tribunal however, upheld the deletion of Rs.70 lakhs under section 68 of the Act observing that when the assessee had already offered sales realisation and such income is accepted by the Assessing Officer to be the income of the assessee, addition of the same amount once again under section 68 of the Act would tantamount to double taxation of the same income.
6. Having heard learned counsel for the parties and having perused the documents on record, we are in agreement with the above view of the Tribunal. According to the Assessing Officer, Rs.70 lakhs represented bogus sales and therefore the eligibility of the assessee's deduction under section 80HHC of the Act came to be reduced by such amount. Having done so, the Assessing Officer further proceeded to add the same amount under section 68 of the Act.
7. In view of the above situation, we do not find any reason to interfere with the Tribunal's order. Before closing, however, one issue needs clarification. As noted earlier, C.I.T. (Appeals) had allowed the appeal of the assessee in toto. He, in fact, reversed the Assessing Officer's finding that the sale was bogus and that no export was made. On this basis, he not only deleted addition under section 68 of the Act, but also directed that the assessee shall be entitled to deduction under section 80HHC of the Act for such disputed amount also. This aspect of the matter was not decided by the Tribunal though both sides presented their rival contentions. In fact the Tribunal's finding that Assessing Officer's order would amount to double taxation proceeds on the basis that such amount of Rs.70 lakhs is deleted while working out section 80HHC benefits. If C.I.T. (Appeals)'s conclusion that the amount in question represented genuine exports sale was sustained, there was no question of double taxation. Ordinarily, therefore, we would have been inclined to remand the proceedings before the Tribunal for a finding on this issue. However, learned counsel for the assessee clarified that the assessee does not claim any deduction under section 80HHC of the Act to the extent of such disputed amount of Rs.70 lakhs. In other words, he agreed that the Assessing Officer's working out of the deductions under section 80HHC of the Act on the export sale of the assessee of Rs.585.21 crores against the original claim of the assessee of such deduction of Rs.585.91 crores is correct. He submitted that, in fact, in the present case, such diminution of the assessee's eligibility for deduction under section 80HHC of the Act would have no bearing on the assessee's ultimate tax liability. With respect to this last submission, we express no opinion. However, in view of a clear stand taken before us and the statement made, we are not required to remand the proceedings before the Tribunal to the above limited extent also.
8. In the result, all tax appeals are dismissed, of course subject to above clarification.
( Akil Kureshi, J. ) ( Harsha Devani, J. ) hki Top