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TMI Blog2008 (2) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... ate for the appellant-revenue. Akshay Bhan, Advocate for the respondent-assessee JUDGMENT The judgment of the court was delivered by Rakesh Kumar Garg,J - 1. This appeal has been preferred by the Revenue against the order dated 25.5.2006 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarh in ITA No.596/CHD/2005 for the Assessment Year 2003-04 proposing following substantial questions of law:- 1.Whether on the facts and in law , the ITAT was correct in upholding that the Central Sales Tax and Sales Tax be not formed the part of total turnover while computing of deduction u/s 80 HHC ? 2.Whether on facts and in law, the Tribunal was right to uphold the order of the CIT (A) that the premium on sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead other sources. c) While computing deduction under Section 80 HHC, the assessee has taken the negative figure of "the profit from export of manufacturing business" as zero. 3. After receiving the explanation of the assessee on these points, the Assessing Officer vide his order dated 31.12.2004 finalized assessment under Section 143(4) of the Income Tax Act as under:- "During the assessment proceedings u/s 143(3) of the Income Tax Act, 1961, the Assessing Officer has noticed that the assessee has not included Sales Tax and CST in the total turnover for the purposes of deduction u/s 80 HHC. The Assessing officer finalized the assessment by including the Sales Tax and Central Sales Tax at Rs.34331/- in the total turnover for computa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80 HHC, CIT(A) relying upon his own order as quoted in the above said order also decided the issue in favour of assessee. 6. The third ground of appeal regarding exclusion of 90 % of interest income of Rs.47,05,138/- from the business profit and assessing under the head 'income from other sources' CIT(A), relying on the decision in the sister concern of the assessee Company M/s Eveline International relevant to Assessment Year 2002-03 adjudicated the matter in favour of the assessee. 7. Being not satisfied with the findings of the CIT(A), the Revenue preferred appeal before the Income Tax Appellate Tribunal who vide their order passed on 25.5.2006 has dismissed the appeal partly by upholding the decision of CIT(A)-I, Ludhiana on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in appeal before Punjab and Haryana High Court against the order in the case of assessee company for the Assessment Year 2002-03. ii) The Tribunal erred in law and on facts in upholding the decision of the CIT(A), that the interest income is to be treated as "business income", instead of 'income from other sources' for computation of deduction u/s 80 HHC as held by the Assessing Officer. The interest income is not derived from exports so as to be eligible for deduction u/s 80 HHC. Department has already preferred an appeal u/s 260 A against such order. iii) The Tribunal erred in law and on facts in dismissing the appeal on the ground regarding exclusion of 90 % of interest income assessable under the head 'income from other sources' f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, is to be treated as business income and the assessee is entitled to claim deduction as such. However, we are unable to accept the contention of Shri Akshay Bhan, learned counsel for the assessee. From the facts and after going through the relevant provisions, we find that the second question of law as raised by the learned counsel for the Revenue is fully covered in favour of the Revenue by judgment of this Court in Malwa Cotton Spinning Mills Limited's case (supra) and thus, this substantial question of law referred is answered in favour of the Revenue and against the assessee. 13. Mr. Vivek Sethi, Advocate appearing on behalf of Mr. Sanjeev Bansal, Advocate counsel for the Revenue has very fairly conceded that question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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