9911796707
TMI Blog2012 (11) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... Ground No.1 is regarding disallowance of Rs.3 lakh paid to directors on account of Guarantee Commissions. 3. It was submitted by Ld. AR of the assessee that this issue is squarely covered by the decision of Tribunal rendered in the assessee's own case for AY 2006-07 in ITA No.738/Ahd/2009 dated 05-06-2009. He submitted a copy of the Tribunal order. 4. Ld. DR of the Revenue supported the orders of authorities below. 5. We have considered the rival submissions, perused the materials on record and gone through the Tribunal order cited by Ld. AR of the assessee. We find that in that year also, the issue involved before the Tribunal was same i.e. disallowance of guarantee commissions paid to directors on account of guarantee given by them to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal bank charges. Regarding ground No.3 i.e. neeting of interest income, reliance placed on this very judgment of Hon'ble Delhi High Court rendered in the case of Shri Ram Honda Power Equip (supra) and also on another judgement of Hon'ble Delhi High Court rendered in the case of CIT v.Pawan Kumar Jain (2008) as reported in 298 ITR 443 (Del). 8. Ld. DR of the Revenue supported the orders of authorities below on both the issues. 9. We have considered the rival submissions, perused the materials on record and gone through the orders of authorities below and judgments cited by Ld. AR of the assessee. We find that in the case of Shri Rama Honda Power Equip (supra), both the issues were before Hon'ble Delhi High Court as whether the interest i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90% from business profit as per clause (baa) of the Explanation to u/s 80HHC. Hence, in the present case also, we decide this issue accordingly. By respectfully following this judgment of Hon'ble Delhi High Court, we direct the Assessing Officer to allow the netting to the assessee, if the assessee can establish nexus between interest income and interest expense by showing that interest expense was incurred for earning interest income. Accordingly, ground No.3 of the assessee is allowed for statistical purposes as per above discussion. 11. Ground No.4, 5 and 6 are inter-connected. As per ground No.4, the grievance of the assessee is that service charges income should be excluded from total turnover for the purpose of deduction u/s.80HHC. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as to whether such processing charges are hit by the Explanation (baa) to Section 80HHC. It was held by Hon'ble apex court that such processing charges are hit by clause (baa) of Explanation to Section 80HHC and therefore 90% of the same should be excluded from the business profit and such receipts should also be included in total turnover for the purpose of computing deduction allowable to the assessee u/s.80HHC. By respectfully following this judgment of Hon'ble apex court, ground No.4 and 5 of the assessee are rejected. 15. Regarding ground No.6 i.e. regarding the claim for assessee for netting of expense against the receipt of after sales service charges of Rs.8,32,212/-, we feel that the same judgment of Hon'ble Delhi High Court ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this circumstances, the expenditure incurred under the welfare scheme for its employees to promote employer - employee relationship is held to have been incurred in the interest of business promotion. The disallowance made is, therefore, cancelled. 19. We find that Ld. CIT(A) has deleted these two disallowances on this basis that expenses were incurred in the interest on business promotion and welfare scheme of its employees to promote employer - employee relationship and hence, we do not find any reason to interfere in the order of Ld. CIT(A) on this issue. Ground No.1 of Revenue is rejected. 20. Ground No.2 of Revenue's appeal is regarding deletion of disallowance made by Assessing Officer of Rs.5,74,774/- on current repairs of machiner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed electricity and write back of warranty provision under clause (baa) of the Explanation to Section 80HHC of the Act. 25. On this issue also, Ld. DR of the Revenue supported the assessment order, whereas Ld. AR of the assessee supported the order of Ld. CIT(A). 26. We have considered the rival submissions, perused the materials on record and gone through the orders of authorities below. We find that this issue has been decided by Ld. CIT(A) in para-17 of his order, which is reproduced below:- "17. I have considered the rival submissions. It is observed that Explanation (baa) specifically includes the terms 'charges' along with other terms like brokerage, commission etc. under the circumstances, the after sales service charges are clearl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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