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TMI Blog2020 (8) TMI 818X X X X Extracts X X X X X X X X Extracts X X X X ..... that the deduction u/s.80HHC of the Act is given in respect of export sale proceeds that were brought into India in convertible foreign exchange and the profit derived attributable thereon alone would be eligible for deduction u/s.80HHC of the Act. We also find that the CBDT vide its Circular in Para 32.10 explaining the amendments to the Finance (No.2) Act, 1991 had categorically clarified that the receipts like interest, commission etc., do not have any element of turnover. Accordingly, the amendment was made to remove the said items from the profits of the business w.e.f. 01/04/1992 pertaining to A.Y.1992-93 onwards. Hence, the intention of the legislature is very clear and it is without any ambiguity and it could be safely concluded that the aforesaid four receipts do not form part of total turnover. We also find that the ld. CIT(A) had placed reliance on the decision of the Hon ble Jurisdictional High Court to support its contention in the case of Kantilal Chhotalal [ 2000 (7) TMI 41 - BOMBAY HIGH COURT] - no infirmity in the order of the ld. CIT(A) granting relief to the assessee. - Decided against revenue. - ITA No.6325/Mum/2010, ITA No.6324/Mum/2010, ITA No.6963/Mum/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 94,92,103/- as deduction in A.Y.1990-91 and the balance sum of ₹ 11,18,955/- in A.Y.1991-92 since the said amount was lying in capital work in progress and the same was not put to use during the A.Y.1990-91. We find that the ld. AO observed that the expenditure incurred on replacement of jigs and fixtures would be capital expenditure and accordingly, granted depreciation thereon. It is not in dispute that assessee had indeed capitalised the replacement cost of jigs and fixtures in its books and had claimed depreciation as per Companies Act in its books. However, for the purpose of Income Tax, the assessee had claimed the said expenditure as the revenue expenditure on the ground that the said expenditure would fall under the category of current repairs . We find that the present state of appellate proceedings is the second round of proceedings, since in the first round, this Tribunal had restored this issue to the file of the ld. CIT(A) for adjudication in the light of various judicial decisions relied upon by the assessee. We find that the expenditure incurred on replacement of jigs and fixtures are basically toolling aids required in the production process and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue's plea. 29. As regards the expenditure on dies moulds, the assessee pointed out that it debited an amount of ₹ 11,17,68,169/- towards dies and moulds only to replace them in the place of worn out dies and moulds. The http://www.judis.nic.in assessee in the memorandum of income added this amount to the total income and claimed the cost of dies and moulds of ₹ 22,66,52,504/- under Section 31 of the Act. The assessee stated that within a period of one year of installation, the life of the dies and moulds would become obsolete and this was due to high production involved. Thus, replacement of the new dye in the place of old dye would qualify for current repairs under Section 31 of the Act. The Assessing Officer, however, rejected the contention of the assessee and the Assessing Officer pointed out that the assessee was claiming depreciation upto 1999-2000 under Section 32 of the Act and only in the year under consideration, it started claiming deduction under Section 31 of the Act. The Tribunal pointed out that the dies and moulds were not plant and machinery, yet the replacement of dies and moulds were not in the nature of installation of machinery in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtile Mills Ltd., reported in (1967) 66 ITR 710 (SC), the Apex Court pointed out that all questions whether of law or of fact, which relate to the assessment year of the assessee could be raised in any year under consideration before the Officer as well as before the Income Tax Appellate Tribunal too and if, for reasons recorded by the departmental authorities in rejecting a contention raised by the assessee, the grant of relief to an assessee is justified on another ground, the Revenue is bound to consider such claim of granting the relief. The Apex Court pointed out that the right of the assessee to the relief is not restricted to the plea raised by him. On the facts before us, when the dies and moulds were attached to the machine to manufacture the designed product, we have no hesitation to accept the plea of the assessee that the claim would fall for consideration only under Section 31 of the Act. 32. In the unreported decision of this Court dated 27.04.2012 in Tax Case (Appeal).No.1011 of 2005 (The Commissioner of Income Tax, Madurai Vs. M/s.Machado Sons) on the question of repair made to a ship, this Court pointed out that when the object of the expenditure was not for b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... replacement of jigs and fixtures does not require any interference. Accordingly, the ground No.1 raised by the revenue for A.Y.1990-91 is dismissed. 4. The last issue to be decided in the appeal of the revenue for A.Y.1990-91 is as to whether the ld. CIT(A) was justified in treating certain receipts as not forming part of the total turnover while computing deduction u/s.80HHC of the Act. 4.1. We have heard rival submissions and perused the materials available on record. We find that the ld. AO in page 4 para 3 of his assessment order dated 10/03/1993 had observed that the assessee had derived the following other income:- a) Dividends ₹ 27,96,695/- b) Income from Units ₹ 749,17,044/- c) Interests ₹ 308,95,599/- d) Profit on sale of investments ₹ 81,16,500/- ₹ 11,67,25,838/-/ 4.2. We find that assessee had pleaded the aforesaid receipts cannot be treated as forming pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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