Law:

Section:

I. Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 1989-90 Where assessee had claimed deduction of commission on indirect export sales to two export houses, fact that aforesaid two export houses had perhaps claimed deduction under section 80HHC could not justify disallowance in hands of assessee [In favour of assessee] The assessee had claimed deduction of commission on indirect export sales to two export houses. The claim was disallowed but the Tribunal allowed the claim. Held that, the aforesaid export houses did not pass on the benefit under section 80HHC to the assessee being the supporting manufacturers. The fact that the aforesaid two export houses had perhaps claimed deduction under section 80HHC could not justify the disallowance in the hands of the assessee. It is exclusively within the domain of the trader as to how he should carry on his business. The revenue authorities could not substitute their views about the manner and mode of carrying on the business. It had been contended by the assessee that the exporters were leading export houses; they secured the export orders and got them executed either by themselves or through others including the assessee. The aforesaid exporters did not retain any margin on the supplies of hand tools made by the assessee-company in execution of their export commitments. Prices paid to the assessee-company for such supplies were the same at which these principal exporters had received the orders. For transferring the export orders to the assessee-company without retaining any margin or incentive thereon, principal exporters had charged commission of 5 per cent to 7 per cent for their services and the efforts made in securing the export orders. The finding recorded by the Tribunal on the aforesaid issue was also based on appreciation of evidence and material available on the record. Hence, disallowance of the assessee claim for deduction under section 80HHC was not justified. II. Section 142A of the Income-tax Act, 1961 - Valuation officer, estimate by - Assessment year 1989-90 Where original assessment order was passed on 4-12-1990 and it had become final between…

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