Law:

Section:

Section 80HHC of the Income-tax Act, 1961 - Deductions - Exporters - Assessment year 1986-87 - Assessing authority disallowed assessee's claim under section 80HHC on ground that required reserve had not been credited in balance sheet filed along with return of income and rejected assessee's contention that reserve had been created in books of account, but due to inadvertence correct balance sheet had not been filed - Commissioner (Appeals) recorded finding that assessee had created a valid reserve, which was also verified by Assessing Officer from books of account and that even if reserve was not created at time of submission of return, it could be created during course of assessment proceedings and such creation of reserve subsequently was a proper compliance of proviso to section 80HHC - Accordingly, Commissioner (Appeals) allowed assessee's claim - Whether there was no infirmity in order of Commissioner (Appeals) - Held, yes FACTS The assessee, a registered partnership firm, claimed deduction under section 80HHC in the assessment year 1986-87. The assessing authority disallowed the claim of deduction under section 80HHC on the ground that the required reserve had not been credited in the balance-sheet filed along with the return of income and rejected the contention of the assessee that the reserve had been duly created in the books of account, but due to inadvertence the correct balance sheet had not been filed. On appeal, the Commissioner (Appeals) allowed the assessee's claim. On revenue's appeal, the Tribunal confirmed the order of the Commissioner (Appeals). On reference : HELD In the instant case, the Commissioner (Appeals) had recorded the finding that the assessee had created a valid reserve, which was also verified by the Assessing Officer from the books of account, and that even if the reserve was not created at the time of submission of the return, it could be created during the course of the assessment proceedings and such creation of reserve subsequently was a proper compliance of the proviso to section 80HHC. [Para 8] Thus, there was no infirmity in the order of the Commissioner (Appeals), which had been confirmed by the Tribunal, which was in…

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