Law:

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Section 250 of the Income-tax Act, 1961 - Commissioner (Appeals) - Procedure in appeal - Assessee in his accounts had shown that he had received loans during relevant year - Assessing Officer, however, did not accept same for want of confirmation letters from creditors, and, accordingly, made additions under section 68 - On appeal before Commissioner (Appeals), assessee produced confirmation letters - Commissioner (Appeals) rejected said additional evidence by holding that assessee's case did not fall under any of exceptional circumstances mentioned in rule 46A - Appeal filed against said order was allowed by Tribunal - Whether in view of sub-rule (4) of rule 46A and provisions of section 250, Commissioner (Appeals) was not justified in rejecting confirmation letters produced by assessee straightaway and he should have directed Assessing Officer to consider said confirmation letters and find out identity, creditworthiness, etc., of persons who had made fixed deposits - Held, yes Section 80HHC of the Income-tax Act, 1961 - Deductions - Exporters - Whether processing charges received by assessee do not form part of export turnovers as only sale proceeds of goods or merchandise alone form part of said turnover - Held, yes FACTS The respondent-assessee in his account had shown that he had received loans during the relevant year. The Assessing Officer did not accept the same since the assessee had only produced the copies of the receipts regarding the loans received and there were no confirmation letters from the creditors. The Assessing Officer, therefore, made addition under section 68 of the loan amount entered in the accounts. In appeal before the Commissioner (Appeals), the assessee had produced two confirmation letters. The Commissioner (Appeals) rejected the said additional evidence relying on the provisions of rule 46A and stated that the assessee's case did not fall under any of the exceptional cases mentioned therein. However, in second appeal, the Tribunal took the view that the Commissioner (Appeals) was not justified in straightaway refusing to entertain the confirmation letters obtained from the aforesaid two persons instead of sending the matter to…

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