9911796707
TMI Blog2006 (6) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... ce 1957. In certain earlier assessment years, disputes arose between the assessee-company and the Central Excise department regarding the rate at which excise duty was payable on assessee's product. The assessee, on the basis of show-cause-cum-demand notices issued to it by the Central Excise department, claimed deductions of the disputed demands in its computations of income for the purpose of income-tax. The appellant's claims for such deductions were allowed in the respective assessment years. Such deductions aggregated to Rs. 1,71,35,268 till 31-3-1980. The said dispute between the assessee-company and the Central Excise department was finally decided in assessee's favour by the Supreme Court during the previous year ended 31-3-1996; i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reopening of the assessment under section 147. The second ground is regarding the computation of business profit for the purpose of section 80HHC inasmuch as whether the sum of Rs. 1,71,35,268 has to be excluded or not. 5. We heard Shri Arvind Sonde, the learned counsel appearing for the assessee. The learned counsel submitted that the assessee is not pressing the first ground regarding the validity of the reopening of assessment. 6. Regarding the second ground, the learned counsel submitted that the lower authorities have erred to hold that the assessment of central excise liability under section 41(1) could not be treated as profit of the business of the assessee for the purpose of section 80HHC. He contended that profits of the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ried on by the assessee-company during the relevant previous year, not to speak of any export activities. The learned departmental representative further submitted that the claim of the assessee is further hit by Explanation ( ba) to section 80HHC(4C) whereby the receipts in the nature of section 41(1) have to be excluded to the extent of 90% in computing the business profits for the purpose of section 80HHC. 8. We considered the matter in detail. The "profits of the business" means the profit and gains computed under the provisions of sections 28 to 43C of the Income-tax Act, 1961. Section 41(1), comes therefore, among the provisions relating to the computation of business profits/gains. Section 41(1) provides for treating the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest, rent charges or any other receipt of a similar nature included in such profit. Any other receipt of similar nature means receipt similar to brokerage, commission, interest, rent charges. The write back provided under section 41(1) for the purpose of nullifying the effect of earlier deductions claimed towards central excise liability is not a receipt similar to brokerage, commission, interest or rent charges. Therefore, Explanation (baa) has no application either. 10. On the other hand, we emphatically find that any amount of profit construed under section 41(1) is nothing but business profits in its texture, colour and character. Therefore, the Assessing Officer is not justified in excluding the amount of Rs. 1,71,35,268 in computin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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