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2012 (11) TMI 188 - SC - Income TaxWhether Provisions for Computation of deduction u/s 80HHC are also applicable u/s 80HHF -90% exclusion of net interest/rent or gross interest/rent Following the decision of Court in case of M/s ACG Associated Capsules Pvt. Ltd. (Formerly M/s Associated Capsules Pvt. Ltd.) & Others Versus The Commissioner of Income Tax, Central-IV, Mumbai & Others2012 (2) TMI 101 - SUPREME COURT OF INDIA - Held that - Ninety per cent of not the gross interest/rent but only the net interest/rent, which has been included in the profits of the business of the assessee as computed under the heads PGBP is to be deducted under clause (1) of Explanation (baa) to Section 80HHC for determining the profits of the business. Matter referred to High Court to work out the deductions within a period of three months from today.
Issues: Interpretation of Section 80HHF of the Income Tax Act, 1961
In this judgment, the main issue revolves around the correct interpretation of Section 80HHF of the Income Tax Act, 1961. The question posed was whether the Income Tax Appellate Tribunal was correct in directing the Department to reduce 90% of the net commission received by the assessee from the profits of the business for computation of deduction under Section 80HHF. The case was initially connected to matters concerning Section 80HHC, but due to perceived differences between the two sections, it was de-tagged for separate consideration. The Court noted that the Department argued that there might be distinctions between the provisions of Section 80HHF and Section 80HHC, while the petitioner-assessee contended that there was no such difference. Consequently, the petitioner sought to withdraw the case for the High Court to provide a definitive answer to the question at hand in accordance with the law. As a result, the Supreme Court granted permission for the withdrawal of the transferred case and directed the High Court to expedite the decision on the interpretation of Section 80HHF, preferably within three months. The High Court was also instructed to consider the judgment of the Supreme Court in a related case for guidance. Ultimately, the transferred case was disposed of as withdrawn, leaving the High Court to resolve the issue of interpreting Section 80HHF of the Income Tax Act, 1961.
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