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TMI Blog2010 (6) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... der for the sake of convenience. 2. First we will take up the appeal of the revenue in ITA No.999/Hyd/2007. Ground Nos. 1 and 6 are general in nature and they require no adjudication. The effective ground of appeal i.e., ground No.2 relates to sales commission paid to foreign agents without TDS. The assessing officer made an addition of ₹ 8,64,90,779 on account of sales commission paid to foreign agents without deducting TDS as per section 40(a)(ia) of the Act. The CIT(A) deleted the addition on the ground that the commission was paid directly to the non resident agents for rendering services abroad which are not liable for deduction of TDS under S.195 of the Act. We find that as per Circular 786 dated 17-2-2000, commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied on the decision of the Apex Court in the case of Liberty India vs. CIT reported in 317 ITR 218 whereas the learned counsel for the assessee relied on the decision of ITAT, Hyderabad, in the case of Godavari Drugs Limited reported in 89 ITD 326. We find that identical issue was decided in favour of the assessee in the assessee's own case for the assessment year 20003-04. It is also undisputed fact that the gain on foreign exchange arises on account of exports of goods and not on purchase of any capital goods. In view of the above, we prefer to follow the decision of the coordinate bench of this tribunal in the case of Godavari (Supra) and therefore, we see no infirmity in the orders of the CIT [A] on this issue and the same is con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered view, the assessing officer is right in reopening the assessment by issuing a notice under section 148 of the Act. On merit, we find that this issue was already dealt with by the larger Bench of Delhi Tribunal in the case of Hindustan Mint and Agro Products Pvt. Limited (supra). The Special Bench of the Tribunal held that a plain reading of specific provision of sec.80IA (9) would indicate that the legislative intent is to prevent repetitive deduction being claimed on the same profit, under different provisions of the Chapter. This ruling provides guidance that where the same profit is eligible for deduction under both the sections viz., 80IA and 80HHC, the deduction u/s 80 HHC will have to be computed by reducing the deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 Thus, it is clear from the above working laid down by the Special Bench that the deduction allowable under S.80HHC of the Act from the export profit is at a lower figure, by computing this deduction after reducing the deduction allowed under S.80IA of the Act. The Special Bench ruling relied on the specific provisions of S.80IA [9] of the Act. Accordingly, we feel it proper to restore this matter to the file of the assessing officer for ascertaining the fact whether he had worked out the deduction under S. 80HHC of the Act in line with the working shown in 'B' above and as per the ruling of the Special Bench of the Tribunal in the case of Hindustan Mint (supra). We direct accordingly. Respectfully ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so decided the similar issue observing that amount received for agreeing not to engage in competitive business is a capital receipt. Even the insertion of sub-section (va) to section 28 of Income-tax Act by the Finance Act, 2002 is effective from 1-4-2003 which brings non compete fees with in the purview of section 28 to make it taxable in the hands of the recipient of such income. Hence the same is not applicable in the assessee's case as the assessment year under consideration is 2002-03. In view of the above, the ground raised by the revenue is dismissed. 7. In the result, both the appeals filed by the revenue are treated as partly allowed for statistical purpose as indicated above. Order was pronounced in the Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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