2012 (10) TMI 1201 - HC - Income Tax

Summary

Issues involved: Interpretation of provisions u/s. 80 HHC for transit income and cash discount, eligibility of Plant and Machinery for depreciation, classification of rental income from sub leasing.

Interpretation of provisions u/s. 80 HHC for transit income and cash discount:
The High Court considered whether transit income and cash discount should be included in the profits of business for the purpose of claiming deduction u/s. 80 HHC. The ITAT's decision to include these components in the profits was upheld, dismissing the revenue's contention against it.

Eligibility of Plant and Machinery for depreciation:
The issue of whether Plant and Machinery located at the Ankleshwar Unit of the assessee, even after the closure of operations, was eligible for depreciation was examined. The revenue's argument, citing a similar case dismissal, was rejected, and it was held that the Plant and Machinery remained part of the block of assets and thus qualified for depreciation.

Classification of rental income from sub leasing:
Regarding the classification of rental income from sub leasing, the ITAT directed the A.O. to treat it as income from House Property instead of income from business as initially assessed. The revenue's objection to this direction was overruled, affirming the ITAT's decision.

The High Court dismissed the appeal based on the above considerations, with no order as to costs.