Law:

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Section 80HHC of the Income-tax Act, 1961 - Deductions - Exporters For purpose of calculation of deduction under section 80HHC, sales tax and excise duty component cannot be included in total turnover Excise duty is to be paid to the State and the same is not a kind of profit in the hands of the assessee. Central excise duty component could not be included in the value of the closing stock. For the purpose of calculation of deduction under section 80HHC sales tax and excise duty component cannot be included in the total turnover. JUDGMENT This is an appeal by the Revenue against the order dated September 24, 2004, passed by the Income-tax Appellate Tribunal, Chandigarh Bench "B", Chandigarh (for short, "the Tribunal"), in I. T. A. No. 375/Chandi/99, raising the following substantial questions of law : "(i) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that central excise duty component could not be included in the value of closing stock ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that for the purpose of calculation of deduction under section 80HHC of the Income-tax Act, 1961, sales tax and excise duty component cannot be included in the total turnover ?" As far as question No. (i) is concerned, the Tribunal, while rejecting the appeal of the Revenue, against the order passed by the Commissioner of Income-tax (Appeals), relied upon the order passed by it for the earlier year in the case of the assessee, wherein it was held as under : "Similar issue had come up before the Tribunal in the assessee's own case for the assessment years 1991-92 to 1995-96 and the same was decided in favour of the assessee vide 9 of order dated October 3, 1997, in I. T. A. No. 462/Chandi/1995 and paragraph 11 of order dated May 13, 2003, in I. T. A. Nos. 99 and 198/Chandi/1996, I. T. A. Nos. 85, 299 and 1237/Chandi/1998. The relevant paragraph 9 of the order of the Tribunal in I. T. A. No. 462/Chandi/1995 is reproduced below : '9. Coming to ground No. 5, the Deputy Commissioner of Income-tax has dealt with the issue in paragraph 8 of the assessment order, which…

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