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TMI Blog2007 (5) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... ort "the Tribunal"), in I. T. A. No. 1130/Chandi/1995 for the assessment year 1992-93. 2 At the time of admission, the following substantial questions of law were framed … ____ "1. 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 cannot be included in the total turnover ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in directing computation of interest income, portfolio income and rental income for the purpose of deduction under section 80HHC as per clause (baa) of the Explanation to section 8OHHC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was not disputed by learned counsel appearing for the Revenue that first issue raised in the appeal is squarely covered by the judgment of this court in I. T. A. No. 293 of 2005 ( CIT v. Vardhman Polytex Ltd. [2008] 296 ITR 382 (P H)) decided on May 22, 2006. Accordingly, for the reasons stated in Vardhman Polytex Ltd.'s case [2008] 296 ITR 382 (P H), this question is answered against the Revenue and in favour of the assessee. Question No. 2 5 As far as question No. 2 is concerned, the dispute is with regard to inclusion of ("portfolio income" and "investment income") in the profits and gains of business while computing deductions under section 8OHHC of the Act. As is evident from the order of assessment, these two r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 80HHC of the Act. 6 The contention of learned counsel for the Revenue is that once it was conceded by the assessee that the income on account of interest and "port folio income" was not part of the business income and the assessment thereof under the head "Income from other sources" having been accepted by the assessee, there is no reason for inclusion of these two types of income in the income from business and profession for the purpose of computation of deduction under section 80HHC of the Act. The question of similar in nature as to whether the income which though does not form part of income from business and profession but still be considered under the same head for the purpose of calculation of deduction under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals). 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 issue was never argued. Once the conceded position on record is that the interest income earned by the assessee does not form part of the income from business or professions as computed at the time of assessment, there arises no question of deduction of 90 per cent. thereof for the purpose of calculation of deductions under section 80HHC of the Act. The question of deduction of 90 per cent. of the income in terms of clause (baa) of the Act would arise only if the same forms a part of the income from the business or profession. Any enabling provision for deduction of a part thereof pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness or profession, the amount of receipt of interest, as mentioned above, has been shown and assessed as income from business or profession, there is no reason for reducing the same out of the income from business or profession for the purpose of calculation of deduction under section 80HHC of the Act, as after including the same in the income from business or profession, the reduction, as envisaged under that provision, would be carried out. This is clear even from what the Tribunal has directed. Accordingly, we do not find any merit in this contention of the Revenue and hold that once the income is assessed as income from business or profession, the same has to be taken as such for the purpose of calculation of profits of the business in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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