2003 (9) TMI 308 - AT - Income Tax

Deduction u/s 80HHC - Netting of interest - HELD THAT - The assessee had also claimed that reduction of 90 per cent should be made from the net interest. The issue of netting of interest has been referred to Special Bench in a different case. We, therefore, set aside the order of the CIT(A) and restore it back to the file of the AO to decide the issue in accordance with the finding given by the Special Bench on this issue. For statistical purposes this ground of appeal is allowed.

Summary

Issues involved:
- Cross-appeals by assessee and Revenue against CIT(A) order for asst. yr. 1995-96.

Assessee's Appeal:
1. Grounds 1(a), (b), and (c) dismissed as not pressed.
2. Grounds 2(a) and 2(b) dismissed due to resolution in subsequent year.
3. Challenge to CIT(A) disallowance of deduction for debenture premium.
- Tribunal, based on previous year's decision, allows deduction.
4. Dispute over interest reduction from profits under s. 80HHC.
- Conflicting Tribunal decisions in previous years, referred to Special Bench.
- Order set aside, referred back to AO for decision based on Special Bench finding.
5. Tribunal decision against assessee upheld, addition sustained.
6. Claim of income from AOP not pressed, dismissed.
7. Fee paid to Registrar of Companies not pressed, dismissed.
8. Addition on foreign travel expenses not pressed, dismissed.
9. Challenge to disallowance of expenses on proposed power project.
- Tribunal holds expenditure as revenue, deletion of addition.
10. General ground not adjudicated.

Revenue's Appeal:
1. Challenge to deletion of addition on excess wastage in cotton yarn production.
- Tribunal dismisses appeal based on previous year's decision.
2. Challenge to deletion of addition on closing stock valuation.
- CIT(A) direction to follow Tribunal order upheld, appeal dismissed.
3. Dispute over deduction under ss. 80HH and 80-I.
- Interest income exclusion reversed, miscellaneous income upheld based on Tribunal decisions.
4. Grounds 5 and 6 dismissed based on Tribunal decisions in favor of assessee.

In conclusion, the Tribunal partly allowed the assessee's appeal and partly allowed the Revenue's appeal based on the specific issues and grounds presented by both parties.