Law: Income Tax Act, 1961

Section: 147,148

Income-tax---Reassessment---Income escaping assessment ---Assessee engaged in manufacturing and export of hand tools (spanners)---Incentive given by Government to exporter to bring down cost of raw material (steel) purchased from foreign country under International Price Reimbursement Scheme (IPRS)---Assessee not utilising imported raw material though receiving incentive money---Income-tax Officer reopening assessment on ground deduction under S.80HHC wrongly allowed to assessee on incentive received under IPRS---Reassessment valid---Indian Income Tax Act, 1961, Ss.147 & 148. The petitioner was engaged in the business of manufacturing and export of hand tools (spanners). For the assessment year 1992-93, the petitioner filed a return showing income at Rs.22,650 after claiming deduction under section 80HHC at Rs.64,34,244. Subsequently, a revised return was filed declaring the same income but claiming deduction under section 80HHC at Rs.69,35,182. The Assessing Officer, however, allowed deduction under section 80HHC at Rs.54,78,739 in the- assessment order, dated December 20, 1994. The assessee filed an application under section 154 of the Income Tax Act, 1961, pointing out that deduction under section 80HHC should have been allowed at Rs.69,49,555 instead of Rs.54,78,739. The petitioner also filed, on January 5, 1995, an appeal before the Commissioner of Income-tax (Appeals) as certain expenditure had also been disallowed by the Assessing Officer. The Assessing Officer decided on January 13, 1995, the petitioners application filed under section 154 and allowed deduction under section 80HHC at Rs.57,66,165 in place of Rs.54,78,739. The petitioner, on February 3, 1995, filed another appeal before the Commissioner of Income-tax (Appeals) against the order passed under section 154, whereby deduction under section 80HHC was not allowed at the amount as claimed by the petitioner. The Commissioner of Income-tax (Appeals), by order dated July 4, 1995, directed the Assessing Officer to re-determine the deduction under section 80HHC after holding that the amount received by the petitioner, as an incentive under IPRS (International Price Reimbursement Scheme), formed…

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