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TMI Blog2017 (9) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome’ should be considered instead of the ‘gross interest receipt’.Also various Hon’ble High Courts have explained the above terms. Therefore tribunal confirm the order of the ld. CIT(Appeals).- Decided against Revenue. - ITA No.1280, 1281 And 1283/Kol /2014 - - - Dated:- 26-4-2017 - SHRI N. V. VASUDEVAN, JM AND DR. A. L. SAINI, AM For The Revenue : Shri Rajat Kumar Kureel, JCIT(DR) For The Assessee : A.K. Tulsyan, AR ORDER Per Dr. Arjun Lal Saini, AM: These three captioned appeals filed by the Revenue, pertaining to Assessment Years 2002-03, 2003-04 and 2006-07, are directed against orders passed by the ld. Commissioner of Income Tax (Appeals) Central- III, Kolkata, in appeal No.167 168 166/CC-II/CIT(A) C-III/2008-09/ Kolkata, dated 31.03.2014, 07.04.2014 07.04.2014, which in turn arise out of assessment orders passed by the Assessing Officer u/s.147/263/143(3) of the Income Tax Act 1961, (hereinafter referred to as the Act ), all dated 31.12.2008. 2. These appeals relate to same assessee, pertaining to different assessment years and common issues involved therefore, these have been clubbed and heard together and a consolidated order i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was accepted, the words included in such profit would be redundant. Moreover, if profit was computed as pleaded by the Revenue, it would give a distorted feature of export profit. Therefore, only net interest can be disallowed and not gross interest . Based on this, the ld. CIT(Appeals) directed the Assessing Officer to take into account the net interest . 5. Regarding claim for depreciation under section 32 on Quarry Land Development, the ld. CIT(Appeals) observed that as per books of account the asessee has been maintaining for the depreciation in the accounting manner of Group depreciation method/declining balance method. Considering the nature of the business, this would have been the appropriate accounting method to provide for the depreciation in the books of account. But for income-tax purposes, for computing the depreciation allowance, the different class of assets comprised in the Project, i.e. Quarries, has to be rearranged as per the Block of Assets and the appropriate depreciation rate allowable as per the depreciation table in the Income Tax Rules. The ld. CIT(Appeals) observed that the depreciation upon grouping the respective assets under the respective bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer in accordance with the provisions of section 32 of I.T. Act. ( ii) That on the facts and circumstances and in law ld. CIT(A) has erred in deleting the disallowance of deduction u/s 80HHC of I.T. Act made by the Assessing Officer in accordance with the provisions of the I.T. Act. ( iii) That on the facts and circumstances of the case, the order of the ld. CIT(A) be vacated and the order of the Assessing officer be restored. 7. The first ground raised by the Revenue relates to the depreciation on Quarry Land Development amounting to ₹ 29,42,646/-. 7.1. The ld. D.R. for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para, and is not being repeated for the sake of brevity. 7.2. The ld. A.R. for the assessee has submitted that the Assessing Officer disallowed the claim of depreciation on Quarry Land Development based on the clarification of the Tax Audit Report, which is entirely wrong. The Tax Auditor in his Tax Audit Report do not say anything that the assessee is not eligible to claim the depreciation, he has just explained that there is no block for such as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/KOL/2014 in favour of the assessee, the Ground No. 1 of ITA NO. 1283/KOL/2014 raised by the Revenue is also dismissed. 8. Ground No. 2 raised by the Revenue relates to the disallowance of deduction under section 80HHC of the Income Tax Act, 1961. 8.1. The ld. D.R. for the Revenue has submitted before us that the assesee-company had earned interest of ₹ 45,52,146/- and paid interest expenditure of ₹ 1,49,83,526/-. The assessee-company has not considered the interest income of ₹ 45,52,146/- while computing the profit of the business for the purpose of section 80HHC. As per Explanation (baa) below sub-section (4C) of section 80HHC, 90% of any receipt by way of brokerage, commission, interest, rent, charges of any other receipt of a similar nature included in the profit of the business is to be excluded from the profit of the business to arrive at the eligible profit of the business for deduction under section 80HHC. As per explanation (baa) of section 80HHC, the assessee has not reduced the interest income at ₹ 45,52,146/- while computing the profit of the business for the purpose of section 80HHC. The ld AR explained that the main issue in this appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the ld. CIT(Appeals). 8.4. In the result, the appeal filed by the Revenue being ITA NO. 1281/KOL/2014 is dismissed. 9. Now we come to the ITA No. 1280/KOL/2014 filed by the Revenue for Assessment Year 2002-03. This appeal is not maintainable because of low tax effect. At the time of hearing, the ld. counsel for the assessee, at the outset, has pointed out that the tax effect involved in this appeal of the Revenue is less than the revised monetary limit fixed by the CBDT vide Circular No. 21/2015 dated 10th December, 2015 at ₹ 10,00,000/- for filing the appeal by the Revenue before the Tribunal and this position clearly evident from the grounds raised by the Revenue in this appeal is not disputed even by the ld. D.R. In Circular No. 21/2015 (supra) issued by the CBDT, the monetary limit for filing the appeals by the Revenue before the Tribunal has been increased to ₹ 10,00,000/- and as clarified in the said Circular, the said monetary limit is applicable retrospectively even to the appeals pending before the Tribunal. The CBDT has also instructed that such pending appeals below this specified tax limit of ₹ 10,00,000/- may be withdrawn/ not pressed. Keeping ..... X X X X Extracts X X X X X X X X Extracts X X X X
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