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TMI Blog2012 (10) TMI 891X X X X Extracts X X X X X X X X Extracts X X X X ..... balance alone could be considered for exclusion, while working out the deduction under Section 80HHC of the Act - issue requires re-working and a re-look by the A.O – matter remanded to the A.O. - ITA Nos.1568 & 1569/Mds/2011 - - - Dated:- 30-4-2012 - Abraham P George, Vikas Awasthy, JJ. For Appellant: Shri G Sitaraman, CA For Respondent: Shri K E B Rangarajan, Junior Standing Council ORDER Per: Abraham P George: These are appeals filed by the assessee in which it assails orders of CIT(Appeals), wherein the CIT(Appeals) upheld calculation of deduction under Section 80HHC of Income-tax Act, 1961 (in short 'the Act') by the Assessing Officer after deducting 90% of the job work receipts. For assessment year 2003-04, asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -04 could not be faulted since the decision of Hon ble Apex Court in the case of Kelvinator of India Ltd. (supra) went in favour of Revenue. However, according to him, the issue involved in both the years was exclusion of processing charges for the purpose of calculating deduction under Section 80HHC of the Act while applying Explanation (baa) to the said Section. According to him, though Hon ble Apex Court in the case of CIT v. K. Ravindranathan Nair (295 ITR 228) had held that receipts like processing charges fell within the ambit of Explanation (baa) to Section 80HHC of the Act, in a subsequent decision in the case of M/s ACG Associated Capsules Pvt. Ltd. v. CIT in Civil Appeal No.1914 of 2012 dated 8th February, 2012, it was ruled t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rent or interest of the assessee is allowable as an expense in accordance with Sections 30 to 44D of the Act and is not to be included in the profits of the business of the assessee as computed under the head Profits and Gains of Business or Profession , ninety per cent of such quantum of the receipt of rent or interest will not be deducted under clause (1) of Explanation (baa) to Section 80HHC. In other words, ninety per cent of not the gross rent or gross interest but only the net interest or net interest, which has been included in the profits of business of the assessee as computed under the head Profits and Gains of Business or Profession , is to be deducted under clause (1) of Explanation (baa) to Section 80HHC for determining t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... processed cashew nuts grown in his farm and he exported the cashew nuts as an exporter. At the same time, the assessee processed cashew nuts which were supplied to him by exporters on job work basis and he collected processing charges for the same. He, however, did not include such processing charges collected on job work basis in his total turnover for the purpose of computing the deduction under Section 80HHC(3) of the Act and as a result this turnover of collection charges was left out in the computation of profits and gains of business of the assessee and as a result ninety per cent of the profits of the assessee arising out of the receipt of processing charges was not deducted under clauses (1) of the Explanation (baa) to Section 80HH ..... X X X X Extracts X X X X X X X X Extracts X X X X
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