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TMI Blog2022 (3) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... w this ground of appeal in favour of the assessee. Exclusion of interest income earned by the appellant from the profit eligible for deduction under Section 80IE - HELD THAT:- On the aspect of netting off of interest income we have considered the judgment passed by the Jurisdictional High Court in the case of Nirmal Ltd. [ 2014 (12) TMI 171 - GUJARAT HIGH COURT ] we find it fit and proper to allow this ground of appeal filed by the assessee by directing the AO to re-compute the addition upon netting off of interest income by excluding the same from profits eligible for deduction under Section 80IE of the Act of the appellant undertaking, in the light of the above observation made. - I.T.A. No. 2072/Ahd/2017 - - - Dated:- 14-3-2022 - Shri Waseem Ahmed, Accountant Member And Ms. Madhumita Roy, Judicial Member For the Assessee : Shri Vartik Chokshi, A.R. For the Revenue : Shri Nilabhra Dasgupta, Sr. DR ORDER PER Ms. MADHUMITA ROY - JM: The instant appeal filed by the assessee is directed against the order dated 23.06.2017 passed by the Commissioner of Income Tax (Appeals)-5, Ahmedabad arising out of the order dated 08.03.2016 passed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. At the time of hearing of the instant appeal the Ld. Counsel also drawn out attention to the Page 61 of the Paper Book being the ledger account of miscellaneous income where the said entry is reflecting as follows: Miscellaneous Income G/L Account Assignment Document Amount in local currency Document Date Entry Date Posting Date Name of offsetting account Text 32010509 KEPL ELECTRICALS P 3700000354 - 365.702.00 6/1/2012 6/20/2012 6/20/2012 KEPL ELECTRICALS PVT. LTD. *Debit Note for Excess Billing PO# 480000801 32010509 20120921 1300000613 -100.00 9/21/2012 9/21/2012 9/21/2012 CASH AT SIKKIM PLANT Loss of Attendance Punch Card (E700422) 32010509 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have further considered the order passed by the Ld. CIT(A) wherefrom it appears that the Ld. CIT(A) simply following the order passed by his predecessor rejected the above claim made by the assessee without dealing the issue on merit. 12. On this aspect we have further considered the judgment passed by the Hon ble Jurisdictional High Court in the case of Nirma Ltd. in Tax Appeal No. 810 of 2013 wherein while dealing with the identical issue the Hon ble Court was pleased to observe as follows: From the record it emerges that during the previous year relevant to assessment year 1997-98, the assessee received additional income of ₹ 29.02 lacs towards discount of the sales of raw materials which the assessee purchased. The assessee, therefore, claimed such amount as part of deduction under section 80IA/80HH of the Act. The Tribunal ultimately upheld the assessee s contention. We see no reason to take a different view. If on the basis of the discounts given by the sellers, the total profit of the assessee from the activity which was otherwise eligible for deduction 80I/80HH of the Act was to that extent increased, there is no reason why such larger sum should qual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed by his predecessor rejected the above claim made by the assessee without dealing the issue on merit. On the aspect of netting off of interest income we have considered the judgment passed by the Jurisdictional High Court in the case of Nirmal Ltd. (Supra). While deciding the issue the Hon ble Court has been pleased to observe as follows: 2. In so far as question Nos. 1, 4, 8, 10 and 11 are concerned, they have a common element, namely, whenever certain income is to be excluded for the purpose of deduction under sections 80-I, 80-IA and 80HH, etc., gross income is to be excluded or only the net thereof is the question. In a separate order passed by us today in Tax Appeal No. 810 of 2013, we have rejected the Revenue's appeal making the following observations: The question is when certain income of the assessee is excluded from the claim of deduction under section 80-I or section 80HH of the Act, should the gross income be excluded or should it be only net, that is, the total receipt minus the expenditure incurred by the assessee for earning such income which should be so excluded. Such a question in the context of deduction under section 80HHC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in both the sets of provisions are different. Section 80HHC is also vitally different and that therefore the concept of netting may not be automatically applied to deduction under sections 80HH and 80-I of the Act. He submitted that number of tax appeals have been admitted by this court on this issue and this appeal may also be likewise admitted. He drew our attention to the order dated May 6, 2013 passed by this court in the case of Bloom Decor Ltd. v. Deputy CIT in Tax Appeal No. 447 of 2013 where at the instance of the assessee, similar question was not considered. On the other hand, learned counsel Shri Soparkar for the assessee, in addition to relying on the decision in the case of ACG Associated Capsules Pvt. Ltd. (supra), also placed heavy reliance on an order dated November 30, 2013 in Tax Appeal No. 213 of 2006 in the case of Rajoo Engineers Ltd. in which the Revenue's appeal raising such a question came to be dismissed relying on the decision in the case of ACG Associated Capsules Pvt. Ltd. (supra). The counsel also relied on a decision of the Delhi High Court in the case of Essel Shyam Communication Ltd. v. CIT [2012] 28 Taxmann.com 243 (Delhi), in which i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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