IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.P.RAY TUESDAY, THE 14TH DECEMBER 2010 / 23RD AGRAHAYANA 1932 ITA.No. 43 of 2009() ----------------------------- ITA.609/COCH/2006 of INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH .................... APPELLANT/RESPONDENT ---------------------------------------- THE COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. BY RI.P.K.R.MENON,SR.COUNSEL, GOI (TAXES), ADV. SRI.JOSE JOSEPH, SC FOR INCOME TAX. RESPONDENT/APPELLANT ----------------------------------------- M/S. POYILAKKADA TRUST, KOLLAM. BY ADV. SRI.P.BALAKRISHNAN, SRI.MOHAN PULIKKAL, SRI.K.C.KIRAN. THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 14/12/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs C .N. RAMACHANDRAN NAIR, & BHABANI PRASAD RAY, JJ. -------------------------------------------- I. T. A. No. 43 of 2009 -------------------------------------------- Dated this the 14th day of December, 2010 JUDGMENT Ramachandran Nair, J. After hearing both sides and after going through the Tribunal's order we notice that the Tribunal besides quoting the Special Bench decision of the Bombay Tribunal, has not considered or decided the issue raised in the appeal. The question raised is on the computation of indirect cost for working out the export profit attributable to trading of goods. This Court has in the decision in CIT V. PARRY AGRO INDUSTRIES LTD., 257 I.T.R. 41 held that the formula provided under Section 80HHC (3) has to be applied for working out indirect cost which is defined in clause (b) of Section 80HHC(3). All what we notice is that Tribunal has extracted the assessment order and order of the CIT (Appeals) and ultimately after referring to Delhi Bench decision, the Tribunal declared that the appeal is allowed. It was the duty of the Tribunal to consider whether the indirect cost worked out by the assessing officer as modified by the CIT (Appeals) is correct or 2 not. Since Tribunal has not considered the issue properly or has not drawn any conclusion of it's own, we allow the appeal by setting aside the order of the Tribunal and restore the appeal back to the file of the Tribunal for fresh decision after hearing both sides. So far as the second question is concerned, that is interest under Section 234D of the Act, the issue is covered by our judgment in CIT V. KERALA PROTEINS AND CHEMICALS, 323 ITR 584. The Tribunal will follow the said judgment and decide that issue also afresh. (C.N.RAMACHANDRAN NAIR) Judge. (BHABANI PRASAD RAY) Judge. kk