9911796707
TMI Blog2014 (3) TMI 1175X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be treated as Income from business for computing deduction u/s. 10A 1. Bank Interest Rs. 1,02,022/- 2. Job Work Charges Rs. 19,26,857/- 3. Exchange difference on loans Rs. 18,62,865/- ----------------- Rs. 38,91,744/- ------------------ 2. The assessee is having a manufacturing unit at SEEPZ, Mumbai for manufacturing of studded jewellery for export, the assessee claimed exemption u/s 10A in respect of the business income. The AO disallowed the claim of exemption u/s 10A in respect of following incomes:- 1. Bank Interest Rs. 1,02,022/- 2. Job Work Charges Rs. 19,26,857/- 3. Exchange difference on loans Rs. 18,62,865/- ----------------- Rs. 38,91,744/- ------------ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... io of decision of the Supreme Court in the case of ACG Associated Capsules P. Ltd, cited supre, and allow interest income having direct nexus with the interest income." 5. It is clear from the finding of CIT(A) that the AO was directed to consider the netting of expenses in view of the decisions of Hon'ble Supreme Court in the case of ACG Associated Capsules Vs. CIT (supra), hence no grievance is left against the order of CIT(A). 6. Second item of disallowance is Job Charges of Rs. 19,26,857/-. 7. The Ld. AR of the assessee has submitted that the disallowance of job charges should be on net based after considering the expenses incurred by the assessee for earning the job charges income. The Ld. AR has relied upon the decision of Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t -. rent and net interest and not gross or net job work receipts Therefore, the decision has no application. This court 111 the case of Commissioner of Income Tax and another Vs M/s. Resonace Laboratories in ITA Nos. 793, 794, 796 & 796/2006, dated 06.06.2012 has taken into consideration the decision of the Supreme Court in the case of M/s Miani Precision Products Pvt. Ltd. vs, The Joint Commissioner of Income Tax and has held that what is :0 be excluded is net receipts and net gross receipts. In view of the afore said decisions, the question of law. IS answered in favour of the revenue and the matter is remanded back to the Assessing Authority to redo the assessment as per the law laid down by the Supreme Court in the case of ACG Associ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be allowed for the purpose of deduction u/s 10A. 11. On the other hand the Ld. DR has submitted that as per schedule 14 of the balance sheet, the exchange difference has been shown on long term loan, therefore it was not a short term or loan taken for working capital. 12. Having considered the rival submissions and relevant material on record, we find that the assessee is having two kinds of loan one is short term loan against export bills which is clear from the schedule of the balance sheet and other is term loan. Even in the schedule 4, the assessee has shown secured loan in foreign currency which is term loan and further the working capital loan under the category of pecking credit, post shipment foreign currency account. As fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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