Ita/46/2008 Of Commissioner Of Income Tax v. K.r.ushasree,Mangad,Kollam

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER TUESDAY, THE 5TH AUGUST 2008 / 14TH SRAVANA 1930 ITA.No. 46 of 2008 -------------------------------- (ORDER DATED 25-2-2004 IN I.T.A.No.58/COCH/2003 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH (ASSESSMENT YEAR 1993-94) ................. APPELLANT/APPELLANT: ------------------------------------ THE COMMISSIONER OF INCOME - TAX, THIRUVANANTHAPURAM. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL,GOI(TAXES) SRI.GEORGE K. GEORGE, SC FOR IT RESPONDENT/ RESPONDENT: -------------------------------------------- SMT. K.R. USHASREE, KOLLAM THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 05/08/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: H.L.DATTU, C.J. & A.K.BASHEER, J. ------------------------------------------- I.T.A.No.46 of 2008 ------------------------------------------ Dated, this the 5[th] day of August, 2008 JUDGMENT H.L.Dattu, C.J. The Revenue is before us in this appeal filed underSection 260A of the Income-tax Act, inter alia, questioning the correctnessor otherwise of the orders passed by the Income Tax Appellate Tribunalin ITA No.58/2003 dated 25.2.2004. 2. The assessee is an exporter of cashew. While completingthe assessment for the assessment year 1993-1994, the Assessing Officer,for computing deduction under section 80 HHC computed the profit of thebusiness after deducting 90% of the processing charges from the profitsand gains of the business and including the same in the total turnover.This was challenged before the first appellate authority. The firstappellate authority directed not to exclude 90% of processing chargesfrom the profits and gains of the business to compute profits of thebusiness stating that processing charges is business income. The firstappellate authority has also directed to exclude the processing chargesfrom the total turnover. This was challenged by the Revenue before theTribunal. The Tribunal upheld the order of the first appellate authorityand dismissed the appeal filed by the Revenue. 3. The Revenue has framed the following questions of law for our consideration and consequent decision. They are:- “1. Whether, on the facts and in the circumstancesof the case the Tribunal is right in law and fact inholding that the processing charges formed part ofthe business income and it cannot be reduced fromthe profits and gains to arrive at the profits of thebusiness for the purpose of computation undersection 80 HHC? 2. Whether on the facts and in the circumstances ofthe case while computing the relief under section80HHC of the Income Tax Act, the processingcharges could be excluded from the total turnover ofthe business? 3. Whether, on the facts and in the circumstancesof the case, and in view of Explanation (ba) toSection 80 HHC and clauses (iiia), (iiib) and (iiic)of section 28, will not turnover take into account allother receipts other than the excluded items ofreceipts? 4. The appeal was filed as early as on 13[th ] day of July, 2004 and since the Registry had pointed out certain defects in filing the appealand since they were cured only in the year 2008, the appeal is now postedbefore us for admission. 5. The learned counsel for the appellant would submit that the issues raised in this appeal is now covered by a recent decision of theApex Court and therefore, we should admit this appeal and issue notice tothe respondent. We are not inclined to accept the submission made by the learned counsel for the Revenue. 4. The appeal was filed as early as on 13[th ] day of July, 2004 and since the Registry had pointed out certain defects in filing the appealand since they were cured only in the year 2008, the appeal is now postedbefore us for admission. 5. The learned counsel for the appellant would submit that the issues raised in this appeal is now covered by a recent decision of theApex Court and therefore, we should admit this appeal and issue notice tothe respondent. We are not inclined to accept the submission made by the learned counsel for the Revenue. 6. The Tribunal had dismissed the Revenue's appeal by anorder passed in the month of February, 2004. Nearly after four years fromthe date of the order, if we have to issue notice to the respondent onlybecause, the Revenue was not diligent in prosecuting the appeal filed inthe year 2004, in our view, it could cause great prejudice and injustice tothe assessee/respondent. 7. In that view of the matter, we decline to entertain thisappeal. Accordingly, the appeal is disposed of. However, we grant libertyto the Revenue to make an appropriate application/review petition beforethe tribunal for appropriate orders.. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE MS (A.K.BASHEER) JUDGE