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TMI Blog2010 (10) TMI 705X X X X Extracts X X X X X X X X Extracts X X X X ..... (A), who has followed the decision of his predecessor from Assessment Year 1998-99 to 2002-03 as well as the order for Assessment Year 2003-04. Further, the Tribunal has decided the issue in favour of the assessee in assessee's own case for various years. Therefore, respectfully following the decision of the Tribunal in assessee's own case for different years and in the absence of any contrary material brought to our notice; this ground of the revenue is dismissed. Deduction u/s 8HHC - interest on housing loan - , the CIT(A) held that providing housing loans to employees is part of business exigency and therefore, such interest on housing loans is certainly income from business even though, it is not directly earned from business transactions. According to him, it is certainly includable with the business income and naturally it should be assessed as business income - Decided against the assessee. - ITA No. 4691/Mum/2007, ITA No. 4621/Mum/2007 - - - Dated:- 20-10-2010 - R.V. Easwar, R.K. Panda, JJ. Heena Doshi for the Appellant Sumit Kuamr, Sr. DR, for the Respondent ORDER R.K. Panda: These are cross appeals and are directed against the order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld DR supported the order of the CIT(A). 4. After hearing both the sides, we find the jurisdictional High Court in the case of M/s Godrej Boyce and Mfg Co Ltd vs DCIT vide ITA No.626 of 2010 has held as under: "74. Our conclusions in this judgement are as follows: i) Dividend income and income from mutual funds falling within the ambit of Section 10(33) of the Income Tax Act 1961, as was applicable for assessment year 2002-03 is not includible in computing the total income of the assessee. Consequently, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to such income which does not form part of the total income under the Act, by virtue of the provisions of Section 14A(1); ii) The payment by a domestic company under section 115o(1) of additional income tax on profits declared, distributed or paid is a charge on a component of the profits of the company. The company is chargeable to tax on its profits as a district taxable entity and it pays tax in discharge of the own liability and not on behalf of or as an agent for its shareholders. In the hands of the shareholder as the recipient of dividend, income by way of dividend d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, accordingly allowed for statistical purpose. 5. Grounds of appeal no.3 by the assessee reads as under: "On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in holding certain amount of interest income as income from other sources instead of business income resulting into reduced claim of deduction u/s 80HHC of the Act." 5.1 The facts of the case in brief are that the Assessing Officer noted from Annexure A to Form no. 10CCAC of the tax audit report that the assessee has claimed a total deduction of Rs.4,56,246/- u/s 80HHC of the I T Act. He noted that in the said working, the assessee has not reduced interest income of Rs.14,45,780/- from the adjusted profits of the business while calculating deduction u/s 80HHC of the I T Act. The AO further noted that the assessee has included the interest income as business income which, according to him, should be treated as income from other sources in terms of the decision of the Hon'ble Bombay High Court in the case of CIT vs Ravi Ratna Exports Pvt Ltd reported in 246 ITR 443. The Assessing Officer asked the assessee to explain as to why the interest income should not be treated as in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, interest on tax free bonds and other interest income. The ground raised by the assessee is accordingly dismissed. ITA No.4621/Mum/2007 (By the Revenue) 7. Grounds of appeal no.1 by the revenue reads as under: "The ld. CIT(A) erred in deleting the disallowance of Rs.34,25,880/-made on account of expenditure for canteen subsidy overlooking the fact that the disallowance was covered by the provisions of section 40A(9) of the Act." 7.1 Facts of the case in brief are that the assessee claimed expenditure to the tune of Rs.34,25,880/- for subsidising canteen facilities for the employees. On being quested by the Assessing Officer, the assessee explained that the said payment was not made to set up any fund/trust and that the assessee had no control over the funds after payment. It was submitted that the amounts represented expenditure actually incurred and as a result was not hit by sec 40A(9). The assessee also relied on the decision of the Tribunal in assessee's own case for Assessment Years 1989-90 to 1996-97 wherein such disallowances have been deleted by the Tribunal. However, the Assessing Officer was not convinced by the reply given by the assessee. He noted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest on housing loans is certainly income from business even though, it is not directly earned from business transactions. According to him, it is certainly includable with the business income and naturally it should be assessed as business income. He, accordingly, directed the AO to consider this amount of Rs.3,76,642/- as income from business for the purpose of computation of deduction u/s 80HHC of the Act. Aggrieved by such order of the CIT(A), the revenue is in appeal here before us. 10 After hearing both the sides and in view of our decision in grounds of appeal no.3 in assessee's own case, interest received on housing loans to employees, in our opinion, cannot be treated as business income for the purpose of deduction u/s 80HHC of the Act. As far as the reliance by the ld counsel for the assessee that the issue was decided in favour of the assessee by the decision of the Tribunal in assesseee's own case for AY 1996-97 and 1997-98, we find the decision of the Tribunal for those years were given prior to the decision of the Supreme Court in the case of K Ravindranathan Nair (supra). Therefore, the decision of the Tribunal in assessee's own case cannot be accepted. The decis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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