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TMI Blog2007 (5) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate Tribunal, Chandigarh Bench "A", Chandigarh (for short, "the Tribunal") in I.T.A. No.1050/Chandi/1996 for the assessment year 1994-95:- "1. Whether on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that depreciation under Section 32 of the Income Tax Act, 1961 was allowable on the plant and machinery in question ? 2. Whether, on the facts, and in the circumstances of the case, the Tribunal was correct in law in holding that for the purpose of computation of deduction under Section 80HHC of the Income Tax Act, 1961, Sales Tax and Central Sales Tax can not be excluded in the total turn over? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the year in question on account of non-receipt of orders. 4. Learned counsel for the revenue submitted that unless the machinery is actually used, no depreciation should be allowed. However, we find that similar contention was considered by this Court in the case of Pepsu Road Transport Corporation's case [2002] 253 ITR 303 wherein it was held that even where the machinery is kept ready for use and could not be put to use, the assessee would be entitled to depreciation as everything ages with the passage of time and even if the machinery is kept ready for use, there is a normal depreciation of value. Accordingly, the question being covered by the judgment of this Court, we answer the same against the revenue and in favour of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The ground of appeal raised by the assessee on this account is extracted below : "That the ld. CIT(A)(C) erred in law and on facts in sustaining the decision of Assessing Officer that interest income considered as income from other sources and be excluded from profits for computation of deduction u/s 80HHC. Directions may be given to consider interest income of Rs.22,24,201/- as part of profits of business and compute deduction u/s 80HHC accordingly." 9. The issue was considered by the Tribunal in paras 13 and 14 of the order passed by it, which are extracted below : "13. Regarding the second issue involved in ground No.4 of appeal of the assessee relating to interest income for the purposes of deduction u/s 80HHC, the ld. A.R. for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer is directed to compute the interest income for the purpose of deduction u/s 80HHC as per newly inserted clause (baa) of the Explanation to section 80HHC for computing the eligible profits and gains of business by reducing 90% of the interest receipts which were included in such profits. Orders are passed accordingly." 10. From a perusal of para 13 of the order passed by the Tribunal, which records the contentions raised by learned counsel appearing for the assessee, it is evident that he only submitted that as per clause (baa) of the Explanation to Section 80HHC of the Act, in order to compute profits and gains of business for the purpose of deduction under Section 80HHC of the Act, 90% of the receipts on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia;" 13. A perusal of the above clause shows that deduction of 90% of the receipts on various accounts including on account of interest is to be reduced, while computing profits and gains of business for the purpose of deduction under Section 80HHC of the Act, which are included in such profits and not otherwise. As is evident from the facts on record that the interest income earned by the assessee, which was sought to be claimed by him to be dealt with as income from business or profession, was in fact assessed as income from other sources, which order was upheld in appeal by the CIT (A). Even though, in the ground, the assessee had raised the issue for consideration of the interest income as part of the profits of business but the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 008] 296 ITR 393 (P H), the Assessing Officer himself had considered the receipts on account of interest as part of the business income. Under those circumstances, it was held that once the Assessing Officer himself had treated the interest income as part of the income from business, there was no occasion to treat the same differently for the purpose of calculation of deductions under Section 80HHC of the Act. The relevant para from the judgment in M/s Avery Cycle Inds. Ltd.'s case [2008] 296 ITR 393 (P H) is extracted below:- "Once at the time of passing of the assessment order in computing the income from business or profession, the amount of receipt of interest, as mentioned above, has been shown and assessed as income from b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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