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TMI Blog2022 (1) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... ur of assessee - Tax Case (Appeal) No.1218 of 2009 - - - Dated:- 21-12-2021 - THE HONOURABLE MR. JUSTICE R. MAHADEVAN and THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ For the Appellant : Mr.S.Sridhar For the Respondent : Mr.M.Swaminathan, Senior Standing Counsel assisted by Mrs. S.Premalatha Junior Standing Counsel JUDGMENT (Judgment of the Court was delivered by R.MAHADEVAN, J.) This tax case appeal has been filed by the appellant/assessee, challenging the order dated 06.02.2009 passed by the Income Tax Appellate Tribunal, 'B' Bench Chennai, in I.T.A.No.2114/Mds/2007, relating to the assessment year 2002-03. 2. By order dated 24.11.2009, this court admitted the aforesaid tax case appeal on the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... second issue, we may refer very briefly to the facts of the case. For the assessment year 2003-04, the assessee filed a return of income claiming a deduction of ₹ 34,44,24,827/- under Section 80HHC of the Act. The Assessing Officer passed the assessment order deducting ninety per cent of the gross interest and gross rent received from the profits of business while computing the deduction under Section 80HHC and accordingly restricted the deduction under Section 80HHC to ₹ 2,36,25,053/-. The assessee filed an appeal against the assessment order before the Commissioner of Income Tax (Appeals), who confirmed the order of the Assessing Officer excluding ninety per cent of the gross interest and gross rent received by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee would be excluded for the purpose of working out the deduction under Section 80HHC of the Act. 14. On a perusal of the judgment of the High Court in Commissioner of Income-Tax v. Asian Star Co. Ltd. (supra), we find that the reason which weighed with the High Court for taking a different view, is that rent, commission, interest and brokerage do not possess any nexus with export turnover and, therefore, the inclusion of such items in the profits of the business would result in a distortion of the figure of export profits. The High Court has relied on a decision of this Court in Commissioner of Income-Tax v. K.Ravindranathan Nair [(2007) 295 ITR 228/165 Taxman 282 (SC)] in which the issue raised before this Court was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 80HHC of the Act. In this case, this Court was not deciding the issue whether ninety per cent deduction is to be made from the gross or net income of any of the receipts mentioned in clause (1) of the Explanation (baa). 15. The Bombay High Court has also relied on the Memorandum explaining the clauses of the Finance Bill, 1991 contained in the circular dated 19.12.1991 of the Central Board of Direct Taxes to come to the conclusion that the Parliament intended to exclude items which were unrelated to the export turnover from the computation of deduction and while excluding such items which are unrelated to export for the purpose of Section 80HHC, Parliament has taken due note of the fact that the exporter assessee would h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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