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TMI Blog2016 (1) TMI 1088X X X X Extracts X X X X X X X X Extracts X X X X ..... ed not be reduced while computing deduction u/s 80IA of the Act. Inclusion of receipt from scrap sales in the total turnover - Held that:- The sale proceeds from scrap may either be shown separately in the Profit & Loss Account or may be deducted from the amount spent by the manufacturing unit on the raw material from which goods are manufactured. The raw material which is not capable of being used for manufacturing the goods will have to be either sold as scrap or might have to be recycled. When such scrap is sold, the sale proceeds cannot be included in the total turnover. Therefore, the proceeds of the sale of such scrap would not be included in the sales in the Profit & Loss Account of the assessee. In the case before us, the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e considered opinion that what is to be excluded under Explanation (baa) of sec. 80HHC is net income included in the profit. Therefore, the orders of the lower authorities are modified and the Assessing Officer is directed to exclude 90% of the net receipt like interest, agency commission, rent etc from the profit of the assessee while computing deduction u/s 80HHC of the Act. - I.T.A.No.250/Mds/2015, I.T.A.No.298/Mds/2015 - - - Dated:- 1-1-2016 - SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER Appellant by : Dr. U. Anjaneyalu, CIT Respondent by : Shri R. Vijayaraghavan, Advocate ORDER PER N.R.S.GANESAN, JUDICIAL MEMBER Both Revenue and assessee filed appeals against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td [2008] 304 ITR 256, found that while computing deduction u/s 80HHC the deduction allowed u/s 80IA need not be reduced. In fact, according to the ld. Counsel, the Madras High Court followed the judgment of the Bombay High Court in CIT vs Nima Specific Family Trust [2001] 248 ITR 29. 5. We have considered the rival submissions on either side and also perused the material available on record. Sec. 80IA(9) is very clear that where any amount of profits and gains of an undertaking is claimed and allowed, deduction to the extent of such profits and gains shall not be allowed under any other provisions of Chapter VI of the Act. It further says that the deduction shall not exceed the profits and gains of such eligible business as the case may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r.U. Anjaneyalu, ld. Departmental Representative also. According to the ld. DR, the CIT(A) has followed the order of this Tribunal in assessee s own case for assessment years 2001-02 and 2002-03, therefore, there is no infirmity in the order of the CIT(A). 9. We have considered the rival submissions on either side and also perused the material available on record. The CIT(A), by following the order of this Tribunal in assessee s own case for earlier assessment years, found that sale proceeds of scrap has to be included in the business profit as well as total turnover while computing deduction u/s 80HHC. Now, the Apex Court in the case of Punjab Stainless Steel Industries(supra) found that things like old furniture are sold, the sale proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cording to the ld. Counsel, the same has to be excluded from the total turnover also. 12. We heard Dr. U. Anjaneyalu, ld. DR also. According to the ld. DR,this issue is covered in favour of the assessee by the order of Special Bench of this Tribunal in ITO vs Saksoft Ltd. 121 TTJ 865. 13. We have considered the rival submissions on either side and also perused the material available on record. Total turnover and export turnover shall be of the same factor. In other words, the denominator and numerator shall be of the same factor while computing the deduction u/s 80HHC. Therefore, once the Assessing Officer excluded the freight and insurance charges from the export turnover the same shall also be excluded from the total turnover. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny other receipt of a similar nature included in the profit has to be reduced while computing deduction u/s 80HHC. According to the ld. DR what is included in the profit is the gross profit and not the net profit. Therefore, no interference in the order of the CIT(A) is called for. 17. We have considered the rival submissions on either side and also perused the material available on record. 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 expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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