9911796707
TMI Blog2014 (12) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... the eligible profit for deduction under different situations depending on whether the exporter is also engaged in the local business or not - when the profit is being excluded from the claim of deduction, not the gross profit but the net thereof, that is the gross profit minus the expenditure incurred for earning such profit should be excluded – Decided partly in favour ofassessee. - TAX APPEAL NO. 316 of 2001 With TAX APPEAL NO. 29 of 2001 - - - Dated:- 11-11-2014 - MR. KS JHAVERI AND MR. K.J.THAKER, JJ. FOR THE APPELLANT : MR SN SOPARKAR, SR ADVOCATE WITH MRS SWATI SOPARKAR, ADVOCATE FOR THE RESPONDENT : MR NITIN MEHTA, ADVOCATE JUDGEMENT Per: K S Jhaveri: 1. While admitting Tax Appeal No.316/2001 on 11.12.2001, the following question of law was formulated for determination; Whether the Appellate Tribunal is right in law and on facts in having held that the appellant was not entitled to claim deductions under Section 80HH and 80I of the I.T. Act in respect of the interest income of ₹ 33,91,668/earned by the appellant and in not permitting adjustment of interest debited to Profit and Loss Account amounting to ₹ 44,72,227/-? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the judgment of the Income Tax Appellate Tribunal (the Tribunal for short) dated 28.2.2013 raising following questions for our consideration: 1. Whether the Appellate Tribunal is right in law and on facts in deleting the disallowance of discount of ₹ 29,02,192/- and transport income of ₹ 6,22,409/made by AO for the purpose of calculation of deduction under Sections 80I 80HH of the IT Act and confirmed by CIT(A) while relying upon its own decisions which have not reached finality and without considering the fact that such expenses incurred from the business income only and not for earning income liable to be excluded? 2. Whether the Appellate Tribunal is right in law and on facts in restoring the issue back to AO to decide for granting benefits of the netting aspect and further directing the AO to allow expenses after verifying nexus between interest income, rent income, discount, insurance, warehousing charges tank rent for netting purpose which are held to be not derived from industrial undertaking, without considering the facts that such expenses were incurred from the business income only and not for earning incomes and hence liable to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HH or 80I of the Act. The question is when certain income of the assessee is excluded from the claim of deduction under section 80I or 80HH of the Act, should the gross income be excluded or should it be only net, that is, total receipt minus the expenditure incurred by the assessee for earning such income which should be so excluded. Such a question in the context of deduction under section 80HHC came up for consideration before the Supreme Court in the case of ACG Associated Capsules Pvt. Ltd v. CIT, 343 ITR 89 (SC). The Supreme Court held that for the purpose section 80HHC of the Act, it is not the entire amount received by the assessee on sale of DEPB credit, but the sale value of less the face value of the DEPB that will represent profit on transfer of DEPB credit by the assessee. Heavy reliance was placed in the case of Topman Exports v. CIT, 342 ITR 49 (SC). Extending such logic, it was further held that even other amounts, such as, interest or rent when are to be excluded for the purpose of explanation (baa) to section 80HHC of the Act. Ninety per cent of not the gross rent or gross interest, but the net thereof shall have be excluded. It was observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.213 of 2006 in the case of Rajoo Engineers Ltd. in which the Revenues appeal raising such a question came to be dismissed relying on the decision in the case of ACG Associated Capsules Pvt. Ltd. (supra). The counsel also relied on a decision of the Delhi High Court in the case of Essel Shyam Communication Ltd. v. Commissioner of Income tax, (2012) 28 taxmann.com 243 (Delhi), in which in detailed consideration, relying on the decision of the Supreme Court in the case of ACG Associated Capsules Pvt. Ltd. (supra), exclusion was approved for deduction under section 80IA of the Act. Having heard the learned counsel for the parties, we see no reason to entertain this tax appeal. The Supreme Court in the case of ACG Associated Capsules Pvt. Ltd. (supra) has already laid down the foundation for the logic for excluding the net profit and not the gross profit from the claim of deduction when it is found that the source of income does not quality for such deduction under section 80HHC of the Act. It is true that section 80HHC represents vastly different scheme of deduction and also provides for complex formula for deriving for the eligible profit for deduciton under different situ ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
