2010 (3) TMI 1149 - AT - Income Tax

Summary

Issues involved: The judgment addresses issues related to the disallowance of deduction u/s.80HHC on interest-income, DEPB licenses, and loss of trading while computing deduction u/s.80HHC, as well as the exclusion of unite-wise profit and the exclusion of the amount received from export turnover.

Issue 1: Disallowance of deduction u/s.80HHC on interest-income
The Tribunal remanded the matter to the Assessing Officer to determine if the interest income is business income or from other sources. If it is business income, netting will be allowed and 90% will be excluded, following the principles laid down by the Delhi High Court and the Tribunal in previous cases. The issue was set aside for further assessment.

Issue 2: Disallowance of deduction u/s.80HHC on DEPB licenses
The Tribunal referred to a Mumbai Special Bench decision, stating that only the net profit of DEPB should be excluded for computing deduction u/s.80HHC. The matter was to be reverted back to the Assessing Officer for consideration in line with the mentioned case law.

Issue 3: Reduction of loss of trading while computing deduction u/s.80HHC
The Tribunal dismissed the issue in favor of the Revenue, citing a decision of the Honorable apex court regarding the interpretation of section 80HHC and the treatment of profits and losses in export business.

Issue 4: Non-allowance of deduction u/s.80HHC on unite-wise profit
Relying on previous Tribunal decisions and case law, the Tribunal allowed the deduction u/s.80HHC on a unite-wise basis, following consistency in the treatment of such claims in the assessee's case.

Issue 5: Exclusion of amount received from export turnover
The Tribunal set aside the issue to the Assessing Officer for verification of the year to which the export proceeds pertain, emphasizing the need for proper assessment before allowing the deduction. The issue was allowed for statistical purposes.

In conclusion, the Tribunal partly allowed the assessee's appeal on statistical purposes, addressing various issues related to deduction claims under section 80HHC of the Income-tax Act, 1961.