Judgment:
Deepak Verma, J.
1. Sri Indra Kumar, senior counsel with Sri E. I. San-mathi appeared for the appellant and Sri K. P. Kumar, senior counsel appeared for the respondent.
2. This appeal under Section 260A of the Income-tax Act, 1961 (hereinafter shall be referred to as 'the Act'), is at the instance of the Revenue against the order of the Income-tax Appellate Tribunal dated April 28, 2000, passed in I.T.A. Nos. 244, 245 and 266/Bang/1998 for the assessment years 1995-96 and 1996-97. These appeals before the Tribunal were filed by the assessee against the order passed by the Commissioner of Income-tax (Appeals). Along with this appeal, we have also heard the connected appeals, the details of which are given in the later part of the order and with this order they will also stand disposed of on the similar directions.
3. Even though four substantial questions of law have been formulated by learned Counsel for the appellant, but after having heard and after perusing the record, we find that only the following substantial question of law would arise for adjudication:
Whether, on the facts and circumstances of the case, the Tribunal was right in law in holding that the machining charges are not to be excluded for the purposes of determining the 'profits of the business' as defined in Clause (baa) of the Explanation to Sub-section (4B) of Section 80HHC of the Act?
4. The short facts material for deciding the said appeal are mentioned hereinbelow.
5. The respondent-assesses is a company in which the public are not substantially interested and is engaged in the business of manufacture and supply of precision products like lapping mandrels and sleeves and components of automobile ancillaries, apart from supply of the said products. The assessee also manufactures these products on job work basis and receives service charges. Thus, the assessee's business consists of exports as well as local sales.
6. The only issue in this appeal is whether the machining charges which arise directly from the activity of manufacturing or processing-cum-sup-ply of products by the assessee can be excluded from the profits of the business for the purpose of computing deduction under Section 80HHC of the Act.
7. After considering the rival contentions as advanced before the Tribunal, it recorded a finding that machining charges are not to be excluded for the purpose of determining the 'profits of the business' as defined in Clause (baa) of the Explanation to Sub-section (4B) of Section 80HHC of the Act. This appeal is only against this part of the order, by which the finding has been recorded on this issue, in favour of the assessee and against the Revenue.
8. Learned Counsel for the parties informed us that for prior assessment years for 1993-94, 1994-95 and 1995-96 and for subsequent assessment year for 1997-98, the Tribunal on the same facts and features of the case between the same parties, had taken just a contra view, i.e., to say in the orders passed for those assessment years, the view expressed by the Tribunal was that machining charges to the extent of 90 per cent. are to be excluded for the purposes of determining of 'profits of the business' as defined in Clause (baa) of the Explanation to Sub-section (4B) of Section 80HHC of the Act.
9. It is also pertinent to point out here that for the assessment year 2001-02, the Tribunal has taken a midway, i.e., to say while excluding 90 per cent. of the machining charge's in the job work performed by the assessee for that assessment year, has taken the remainder after netting off the expenditure incurred in rendering the job work from the business profits.
10. On account of the inconsistent views expressed by the Tribunal with regard to the question of law formulated hereinabove, we are of the considered opinion that all the orders passed by the Tribunal for these assessment years deserve to be set aside and the matters deserve to be remitted to the Tribunal for fresh adjudication, after affording opportunity of hearing of both sides.
11. After having heard learned Counsel for the parties and on a perusal of the records, at one point of time, we thought it condign and seemly to decide the appeal ourselves on the merits, but when we came to know that the Tribunal had been taking inconsistent view for different assessment years, we thought it fit and more appropriate to remand the matters so that all the contentions which have been put forth before us can be hammered, canvassed and advanced before the Tribunal itself, so as to set the controversy at rest, at least at the level of the Tribunal. Even otherwise, it is more appropriate to remit the matters to the Tribunal, as it was not sure with regard to correct interpretation of law applicable to the facts and legal aspects to the cases.
12. In the light of the aforesaid contention and for the reasons mentioned hereinabove, we are of the considered opinion that ends of justice would be met if the impugned orders passed by the Tribunal are set aside, which are also the subject-matter in the connected appeals, i.e., I. T. A. Nos. 462-465 of 2004 and I.T.A. No. 1046 of 2006 arid then to remand the matters to the Tribunal for de novo hearing on the merits, after affording an opportunity of hearing to both sides.
13. However, we may hasten to clarify that in any case we have not touched the merits of the matter and both parties would be at liberty to put forth all their contentions before the Tribunal, which we are sure, would be considered by it in accordance with law.
14. In the light of the aforesaid, we refrain from answering the question of law framed by us.