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TMI Blog2013 (2) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... of sales tax subsidy from “profits of business” for the purpose of computing deduction u/s 80HHC - Held that:- Neither the sales tax subsidy nor the profits from discounts on early payments is of similar nature to brokerage, commission, interest, rent or charges, which may allow the revenue to deduct profit to the extent of the 90% of such sum for the purposes of Section 80HHC. The judgment in Ravindranathan Nair's case (2007 (11) TMI 10 - SUPREME COURT OF INDIA), relates to processing charges, which will fall within the expression “charges” which are to be reduced by 90% for the purposes of calculating the export income. Therefore, the aforesaid judgment has no applicability to the issue raised in the present case - no substantial questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case, the Hon'ble Income Tax Appellate Tribunal is justified in dismissing the appeal of revenue on the issue of Software expenses by relying upon the decision of Hon'ble P H High Court in the case of CIT Vs. Varinder Agro Chemicals Ltd. reported at 309 ITR 272, whereas the department has filed appeal against this order before the Hon'ble Supreme Court which is still pending? (iv) Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal is justified in holding that sales tax subsidy amounting to Rs.6,80,61,977/- is to be treated as business income but at the same time 90% of such receipt is to be excluding from the profits of business? (v) Without prejudice to above, whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the assessment proceedings? (ii) Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal is justified in directing the A.O not to exclude 90% of the amount of sales tax subsidy from profits of business for the purpose of computing deduction u/s 80HHC of the Act by ignoring the decision of Hon'ble Supreme Court in the case of K. Ravindranathan Nair reported at 295 ITR 228(SC), as the Sales Tax Subsidy is an independent income of the assessee not related to export income and, hence, 90% of the same has to be excluded by considering it as any other receipt of a similar nature included in such profit in clause (baa) to Section 80HHC? Learned counsel for the revenue has pressed Question Nos. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature included in such profits; and (2) the profits of any branch, office, warehouse or any other establishment of the assessee situate outside India. Learned counsel for the appellant relies upon the Supreme Court judgment reported as 295 ITR 228 Commissioner of Income Tax v. K. Ravindranathan Nair, to contend that the 90% of the amount of eligible profits has to be deducted for the purposes of Section 80HHC. In K. Ravindranthan Nair's case (supra), the amount which was reduced from the profits was the processing charges incurred by the assessee for processing of cashew nuts grown in his farm. The assessee was an exporter and also a job worker when he processed cashew nuts on job basis. Clause (1) of Explanation (baa) permits ..... X X X X Extracts X X X X X X X X Extracts X X X X
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