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TMI Blog2016 (2) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... n CIT vs Nima Specific Family Trust [2000 (12) TMI 87 - BOMBAY High Court], J.P. Tobacco Products P. Ltd vs CIT [1996 (8) TMI 29 - MADHYA PRADESH High Court] and Apex Court in Jt. CIT vs Mandideep Engineering and Packaging Industries P. Ltd [2006 (4) TMI 75 - SUPREME Court] found that deduction allowed u/s 80HHC need not be reduced while computing deduction u/s 80IA of the Act. In view of the judgment of Bombay High Court in Nima Specific Family Trust(supra) which was followed by the jurisdictional High court in MRF Ltd. (supra), this Tribunal do not find any reason to interfere with the order of the lower authority. Sale proceeds of scrap - whether has to be included in the business profit as well as total turnover while computing dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnover also. Exclusion of 90% of interest, agency commission, rent and miscellaneous income from the profits of business while computing deduction u/s 80HHC - Held that:- As rightly submitted by the ld. Counsel, 90% the miscellaneous incomes like, interest, agency commission, rent etc. which are included in the profit of the assessee has to be excluded while computing deduction u/s 80HHC of the Act. The profit of the business has to be computed under the provisions of the Income-tax Act, 1961, therefore, the expenditure incurred by the assessee has to be excluded and what is included is the net income and not the gross income. This Tribunal is of the considered opinion that what is to be excluded under Explanation (baa) of sec. 80HHC is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T.A.No. 104/Mds/2009, dated 21.4.2011. According to the ld. DR, this Tribunal has not considered the provisions of sec. 80IA(9)of the Act, therefore, the deduction allowed under any of the sections of Chapter VI has to be reduced while considering the deduction under any other provisions of Chapter VI. 4. On the contrary, Shri R. Vijayaraghavan, ld. Counsel for the assessee submitted that the Madras High Court had an occasion to consider an identical issue in CIT vs MRF Ltd, Tax Case Appeal No.1020 of 2009. According to the ld. Counsel, the Madras High Court by following its earlier order in DCIT vs Chola Textiles P. Ltd [2008] 304 ITR 256, found that while computing deduction u/s 80HHC the deduction allowed u/s 80IA need not be reduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri R. Vijayaraghavan, ld. Counsel for the assessee submitted that the Apex Court in CIT vs Punjab Stainless Steel Industries, 364 ITR 144, had an occasion to consider an identical issue. The Apex Court found that sale proceeds of the scrap need not be included in the total turnover. The CIT(A), by following the order of this Tribunal in assessee s own case for assessment years 2001-02 and 2002-03 in I.T.A.Nos.1240 1241/Mds/2006 dated 28.12.2007, disallowed the claim of the assessee. The judgment of the Apex Court in Punjab Stainless Steel Industries(supra) was not available before the lower authorities. 8. We heard Dr.U. Anjaneyalu, ld. Departmental Representative also. According to the ld. DR, the CIT(A) has followed the order of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority. In view of the judgment of the Apex Court in Punjab Stainless Steel Industries(supra) and for the reasons stated therein, we set aside the orders of the lower authorities and the Assessing Officer is directed to exclude the sale proceeds of scrap from the total turnover. 10. The next ground of appeal is with regard to exclusion of freight and insurance from the total turnover. 11. Shri R. Vijayaraghavan, ld. Counsel for the assessee submitted that freight and insurance charges are excluded from the export turnover. However, the Assessing Officer failed to exclude the same from the total turnover. Therefore, according to the ld. Counsel, the same has to be excluded from the total turnover also. 12. We heard Dr. U. Anjaneyalu, ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer has to confine himself only to the net receipt and not the gross receipt. The ld. Counsel placed his reliance on the judgment of the Apex Court in ACG Associated Capsules Pvt. Ltd vs CIT, 2012] 243 ITR 89. 16. On the contrary, Dr.U.Anjaneyalu, ld. DR submitted that Explanation (baa) of sec. 80HHC clearly says that profit of the business means the profits of the business as computed under the head profits and gains of business or profession . The ld. DR further submitted that 90% of the sum referred to in sec. 28 or of any receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature included in the profit has to be reduced while computing deduction u/s 80HHC. Accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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