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TMI Blog2020 (2) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... uction of even these receipts is warranted in terms of the explanation (baa) to Section 80 HHC. Since this appeal is on substantial question of law and further, since no perversity as such has been pointed out in the findings of fact recorded by the fact finding authorities, we hold that even shipping agency fees are required to be reduced from the profits in terms of clause (baa) to Section 80 HHC. Reduction has to be made not on gross basis, but on net basis only. Accordingly, we hold that though the receipts by way of shipping agency fees and higher charges for machinery and installation will have to be reduced in terms of explanation (baa) to Section 80 HHC, such receipts will have to be computed on net basis and not on gross basis. Accordingly, the reduction will also have to be effected only on net basis and not on gross basis. See M/S ACG ASSOCIATED CAPSULES PVT. LTD. [ 2012 (2) TMI 101 - SUPREME COURT] Receipts by way of shipping agency fees and the higher charges of machinery and installation will have to be reduced in terms of the explanation (baa) to Section 80 HHC of the Income Tax Act. However, such reduction will have to be on net basis and not on gross basis. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rove the accounts after the close of the year, could be disallowed on the ground that the writing off of such bad debt did not take place in the relevant previous year - HELD THAT:- Issue covered in favour of the Appellant-Assessee and against the Respondent-Revenue as relying on TRF. LTD [ 2010 (2) TMI 211 - SUPREME COURT], KERALA STATE INDUSTRIAL DEVT. CORPORATION LTD [ 2012 (9) TMI 805 - SUPREME COURT] - TAX APPEAL NO. 30 OF 2007 - - - Dated:- 3-2-2020 - M.S. SONAK SMT. M.S. JAWALKAR. JJ. Mr. R. G. Ramani, with Mr. P. Kakodkar, Advocates for the Appellant. Ms. S. Linhares, Standing Counsel for the Respondent. ORAL JUDGMENT : (Per M.S. SONAK, J.) Heard Mr. R.G. Ramani for the Appellant-Assessee and Ms. S. Linhares, learned Standing Counsel for the Respondent-Revenue. 2. This appeal pertains to the Assessment Year 1997-98. 3. This appeal was admitted on 25th June, 2007, on the following substantial questions of law : A) Whether on the facts and in the circumstances of the case, the receipts by way of Shipping Agency fees and hire charges of machinery and installations have to be reduced in terms of the said clause (baa); and if the said re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same has to be divided into two parts :- (i) Whether, in the facts and in the circumstances of the present case, the receipts by way of Shipping Agency fees and hire charges of machinery and installations have to be reduced in terms of the clause (baa) to Section 80 HHC ? (ii) If the aforesaid question of law is to be answered in favour of the Respondent-Revenue and against the Appellant-Assessee, then, whether the reduction is to be of the gross receipts or the net receipts ? 5. In so far as hire charges of machinery and installations are concerned, this question has been squarely answered against the Appellant-Assessee and in favour of the Respondent-Revenue in Tax Appeal No.53/2006 decided on 7th May, 2005. Incidentally, this was also an appeal instituted by this very Appellant in relation to the Assessment Year 1996-97. Applying the reasoning therein, it will, therefore, have to be held that the hire charges of machinery and installations will have to be reduced in terms of clause (baa) to Section 80 HHC. 6. In so far as shipping agency fees are concerned, again, we note that for the previous assessment year, as also for the assessment year with which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llation will have to be reduced in terms of the explanation (baa) to Section 80 HHC of the Income Tax Act. However, such reduction will have to be on net basis and not on gross basis. 10. In so far as substantial question of law (B) is concerned, the same is directly covered against the Appellant-Assessee and in favour of the Respondent-Revenue in Sesa Goa Ltd. vs. The Commissioner of Income Tax Tax Appeal No.53/2006 decided on 7/5/2015. Accordingly, this substantial question of law is decided against the Appellant-Assessee and in favour of the Respondent-Revenue. 11. In so far as substantial question of law (C) is concerned, this issue is covered in favour of the Appellant-Assessee and against the Respondent-Revenue in Principal Commissioner of Income Tax vs. Sesa Resources Ltd.Tax Appeal No. 57 of 2016 decided on 16/8/2017 and in the Commissioner of Income Tax vs. V.S. Dempo Co. Pvt. Ltd. Tax Appeal No.58 of 2007 decided on 20/7/2019. Accordingly, the substantial question of law (C) is answered in favour of the Appellant-Assessee and against the Respondent-Revenue. 12. In so far as the substantial question of law (D) is concerned, we have to again fall back upon th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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