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TMI Blog2015 (4) TMI 1110X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the respondent - assessee's income from hire / lease from vessels / barges etc. were a part of its business income under the head of profit and gain of business as a part of its composite business. The order in revision of the Commissioner of Income Tax, seeks to reclassify income from profit and gain of business as income from other sources merely on the ground that such income is not connected with export business and does not qualify for export business. This view of the Commissioner of Income Tax is not correct in law and the view taken by the Assessing Officer cannot be said to be erroneous. This is for the reason that undisputedly to take care of such contingencies that the parliament has prescribed a formula in Section 80 HHC (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Naniwadekar, Advocate with Ms. Vinita Palyekar, Advocate ORAL JUDGMENT : These two appeals filed under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') have been filed against two orders of the Income Tax Appellate Tribunal (hereinafter referred to as 'I.T.A.T.') both dated 30 December 2005 passed for assessment year 1995-1996 and 1996-1997. 2. Both these appeals were admitted on 27 November 2006 on the following common substantial question of law: Whether on the facts and in the circumstances of the case the ITAT was justified in law in setting aside the order passed by the CIT without giving any finding, whether the lease hire charges and refund of duty on export p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed under Section 143 (3) of the Act. The Commissioner of Income Tax by his order dated 1 February 2001 held that the order dated 4 February 1999 is erroneous for the reason that while computing deduction under Section 80 HHC of the Act income comprising of hire charges for vessels and refund of duty on export proceeds cannot be classified as Business Income but has to categorized as Income from other sources. This on the ground that the above income is not connected with the respondent's assessee's export business. Consequently, the order dated 4 February 1999 passed under Section 143 (3) of the Act by the Assessing Officer was set aside and the issue of deduction under Section 80 HHC of the Act was restored to the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trial Co. Ltd. V. Commissioner of Income Tax reported in (2000) 243 ITR 83 (SC). in support of the view that where two views are possible and an Assessing Officer has taken one view it cannot be treated as an erroneous or prejudicial to the interest of the revenue merely because the Commissioner has a different view on the subject. 8. Ms. Desai, learned counsel appearing for the revenue in support of the appeals submits that the impugned order dated 30 December 2005 of the I.T.A.T. could not have dismissed the appeal without having considered the issue whether or not the income on account of lease / hire of vessels / barges etc. is income from business or income from other sources. It is submitted that the I.T.A.T. failed to deal wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... win test of being erroneous in law and prejudicial to the interest of the revenue. Both these tests have to be cumulatively satisfied. The Assessing Officer while passing the assessment order under Section 143 (3) of the Act had considered the income on account of hire/lease of vessels / barges etc. as part of the respondent - assessee business income as it formed a part of its composite business income under the head of profits and gain of business. The Commissioner of Income Tax in exercising his powers in revision has sought to revise the same on the ground that the aforesaid income has for the purposes of Section 80 HHC of the Act has to be excluded from business income and considered as income from other sources. This for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sources, then clause (baa) of the explanation to Section 80 HHC of the Act would be rendered redundant. This is for the reason that then there would be no occasion to reduce the profits and gains of business by 90% of any income which falls therein. It is well settled principle of law that a statute should not be so interpreted that any part of statute is rendered redundant. Besides, in any view of the matter, the view taken by the Assessing Officer on the basis of the law as it then stood is a possible view. Thus, the exercise of jurisdiction under Section 263 of the Act by the Commissioner of Income Tax is not justified. In view of the above, we find no fault with the impugned order of the I.T.A.T. as the income on account of hire charges ..... X X X X Extracts X X X X X X X X Extracts X X X X
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