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2014 (9) TMI 788 - BOMBAY HIGH COURTClaim of deduction u/s 80HHC – Manufacture and trading of diamonds – Rejection of rough diamonds - Held that:- The Commissioner and Tribunal was rightly of the view that the nature of the transaction is not being speculative in character - once the main business is identified, if some incidental activities or transaction or dealing in foreign exchange is undertaken but that is also related to some extent to the main business activity, then, it could not be said that the assessee is in speculative business or speculative dealings is ordinarily a part of his business. The deduction of the value of the export of rough rejected diamonds from the cost of purchase of rough diamonds is held to be correct - the alternate plea that apart from reducing the import cost from the total export turnover, it shall also be reduced from the total turnover which exceeds the export income - once again the question has been considered and decided in the peculiar facts and in relation to the present assessee - No general rule has been laid down - The matter has to be decided on case to case basis - rough diamond constitutes only 0.78% of the total turnover and if those diamonds which are found to be incapable for further processing are sold in unfinished form, that conclusion cannot be termed as perverse or vitiated by any error of law apparent on the face of record – Decided against revenue.
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