THE ASSTT. CIT, VAPI Circle , V. UMEDICA LABORATORIES LTD.,

ITA 1341/AHD/2003

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9236 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 06-08-2009
• Assessment Year: 2000-2001
• Appeal Filed On: 07-04-2003
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C PANDIT
• Assessee Lawyers: S N SOPARKAR
• Keywords: Business income; Bad and doubtful debts
• Section: 43B; 80HHC; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI T.K.SHARMA, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER DATE OF HEARING : 06/08/09 DRAFTED ON: 20/ 08/09 ITA NO.1341/AHD/2003 ASSESSMENT YEAR : 2000-01 THE ACIT VAPI CIRCLE VAPI VS. UMEDICA LABORATORIES LTD. PLOT NO.221, GIDC VAPI PAN/GIR NO. : - (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI M.C.PANDIT, DR RESPONDENT BY: SHRI S.N.SOPARKAR, AR O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE LD.CIT(APPEALS)-VALSAD, DATED 24/01/2003 PASSED F OR ASSESSMENT YEAR 2000- 01. 2. GROUND NO.1 OF APPEAL OF THE REVENUE READS AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED LD.CIT(APPEALS) HAS ERRED IN DELETING DISALLOWANCE OF RS.68,67,803/- MADE ON ACCOUNT OF EXCISE DUTY. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSI NG OFFICER OBSERVED THAT THE ASSESSEE RECEIVED EXCISE REFUND OF RS.68,67,803 /- WHICH WAS NOT INCLUDED IN THE TRADING ACCOUNT. THE ASSESSING OFFICER FURT HER OBSERVED THAT IN ASSESSMENT YEAR 1998-99 ALSO, EXCISE REFUND RECEIVA BLE AMOUNTING TO RS.82.07LACS WAS CHARGED TO TAX. ACCORDING TO HIM, THE HON'BLE SUPREME ITA NO.1341/AHD /2003 THE ACIT VS. UMEDICA LABORATORIES LTD. ASST.YEAR - 2000-01 - 2 - COURT IN CIT VS. CHOWRANGHEE SALES BUREAU 87 ITR 54 2 (SC) AND IN THE CASE OF CIT VS. T. NAGGI REDDY REPORTED IN (1993) 202 I TR 253 (SC), THE SAME WAS A TRADING RECEIPT LIABLE TO TAX AND, HENCE, MAD E ADDITION OF THE SAME TO THE INCOME OF THE ASSESSEE. 4. IN APPEAL BEFORE THE LD.CIT(APPEALS), THE ASSESS EE SUBMITTED THAT EXCISE DUTY PAID AT THE TIME OF EXPORT OF GOODS WAS NOT DEBITED TO PROFIT & LOSS ACCOUNT, BUT TO EXCISE REFUNDABLE ACCOUNT. T HE EXCISE DUTY REFUND AGAINST THE SAME WAS CREDITED IN THIS ACCOUNT. IT WAS, FURTHER, SUBMITTED THAT COPIES OF EXPORT BILLS WERE SUBMITTED DURING THE AS SESSMENT PROCEEDINGS CLARIFYING THAT EXCISE DUTY PAID IS NOT INCLUDED IN EXPORT BILLS. IT WAS, THEREFORE, PRAYED THAT THE ADDITION MADE SHOULD BE DELETED. 5. THE LD.CIT(APPEALS) AFTER CONSIDERING THE SUBMIS SIONS OF THE ASSESSEE OBSERVED THAT ON THE BASIS OF DETAILS FILED BEFORE HIM AND ALSO CONSIDERING THE ORDERS OF THE TRIBUNAL PASSED IN ASSESSMENT YEARS 1 996-97 & 1998-99 HELD THAT THE CLAIM OF THE ASSESSEE REGARDING NON-TAXAB ILITY OF EXCISE REFUND WAS CORRECT AND, ACCORDINGLY, DELETED THE ADDITION. 6. THE LD.DEPARTMENTAL REPRESENTATIVE RELIED ON TH E ORDER OF THE ASSESSING OFFICER, WHEREAS THE LD. AUTHORISED REPR ESENTATIVE OF THE ASSESSEE SUPPORTED THE ORDER OF THE ASSESSING OFFICER. ITA NO.1341/AHD /2003 THE ACIT VS. UMEDICA LABORATORIES LTD. ASST.YEAR - 2000-01 - 3 - 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. IN THE INSTANT CASE, THE ASSESSEE IS ENGAGED IN MANUFACTURING AND EXPORT OF DRUG FORMULATION AND ACCORDING TO THE LD.CIT(APPEALS) WHEN EXPORTS ARE M ADE, EXCISE DUTY PAID ON THE GOODS EXPORTED ARE DEBITED BY THE ASSESSEE IN E XCISE DUTY ACCOUNT WHICH IS REFLECTED IN THE BALANCE-SHEET AS RECEIVABLE. I N SUBSEQUENT YEAR, WHEN THE ASSESSEE GETS THE REFUND FROM EXCISE DEPARTMENT ON PRODUCING EXPORT DOCUMENTS, THE ASSESSEE CREDITS THE REFUND IN THE E XCISE DUTY ACCOUNT. ACCORDING TO THE ASSESSING OFFICER, SUCH REFUND OF EXCISE DUTY WAS A TRADING RECEIPT IN THE HANDS OF THE ASSESSEE AND, THEREFORE , HE ADDED THE SAME TO THE INCOME OF THE ASSESSEE WHICH LD.CIT(APPEALS) FOLL OWING THE ORDER OF THE TRIBUNAL PASSED IN THE CASE OF THE ASSESSEE IN ASS ESSMENT YEARS 1996-97 & 1998-99 DELETED THE SAME. THE REVENUE IS IN APPEA L BEFORE US. WE FIND THAT THE REVENUE COULD NOT DISPUTE THE FACT THAT THE AMO UNT OF REFUND RECEIVED BY THE ASSESSEE WAS TOWARDS REALIZATION OF AN ASSET RE FLECTED IN THE BALANCE-SHEET IN EARLIER YEARS AND THE REVENUE HAS BROUGHT NO MAT ERIAL BEFORE US TO SHOW THAT THE REALIZATION WAS MORE THAN THE AMOUNT SHOWN AS A SSET BY THE ASSESSEE. IN THE ABOVE FACTS, IN OUR CONSIDERED OPINION, THE ADD ITION WAS MADE BY THE ASSESSING OFFICER ON A WRONG FOOTING WHICH IS UNS USTAINABLE. WE, THEREFORE, DO NOT FIND ANY DEFECT IN THE ORDER OF THE LD.CIT(A PPEALS) AND, THEREFORE, THE GROUND OF APPEAL OF THE REVENUE IS REJECTED. ITA NO.1341/AHD /2003 THE ACIT VS. UMEDICA LABORATORIES LTD. ASST.YEAR - 2000-01 - 4 - 8. GROUND NO. 2 OF APPEAL OF THE REVENUE READS AS UNDER:- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED LD.CIT(APPEALS) HAS ERRED IN ALLOWING RS.2, 61,453/- BEING DISALLOWANCE U/S.43-B. 9. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS ING OFFICER OBSERVED THAT PAYMENT TO PF & ESI WERE MADE BEYOND THE DUE DATE P RESCRIBED UNDER THE RESPECTIVE ACT. THEREFORE, THE ASSESSING OFFICER DISALLOWED THE DEDUCTION BY INVOKING PROVISIONS OF SECTION 43B OF THE I.T. ACT, 1961 R.W.S. 36(1)(VA) OF THE I.T. ACT, 1961. 10. IN APPEAL, THE LD.CIT(APPEALS) OBSERVED THAT FR OM THE DETAILS OF PAYMENTS MADE TO PF & ESI FILED BY THE , IT IS OBS ERVED THAT THERE HAS BEEN DELAY IN RESPECT OF PAYMENT OF PF BY 2 TO 3 DAYS RE LATING TO THE MONTHS OF APRIL, JUNE, JULY & OCTOBER-1999. THE LD.CIT(APPE ALS) OBSERVED IN MOST OF THE MONTHS, THE PAYMENTS WERE MADE BEFORE THE STIPU LATED PERIOD BY THE ASSESSEE AND THAT IN THE MONTHS NOVEMBER-1999 TO MA RCH-2000, THERE WAS NO DELAY IN MAKING SUCH PAYMENTS. HE FOLLOWING THE D ECISION OF ITAT AHMEDABAD BENCH IN THE CASE OF DCIT VS. VALLAB GLAS S WORKS LTD. REPORTED IN 76 TTJ 652, WHEREIN IT HAS BEEN HELD THAT IF PAY MENTS WERE MADE BEFORE THE END OF THE ACCOUNTING YEAR, THE SAME WAS ALLOWABLE U/S.43B OF THE I.T. ACT, 1961, DELETED THE DISALLOWANCE MADE BY THE ASSESSIN G OFFICER. ITA NO.1341/AHD /2003 THE ACIT VS. UMEDICA LABORATORIES LTD. ASST.YEAR - 2000-01 - 5 - 11. THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESS EE AT THE TIME OF HEARING ARGUED THAT THE ISSUE NOW STANDS COVERED BY THE DEC ISION OF THE HON'BLE SUPREME COURT IN THE CASE OF VINAY CEMENTS LTD. AND THE HON'BLE DELHI HON'BLE HIGH COURT IN THE CASE OF COMMISSIONER OF I NCOME TAX VS. P.M. ELECTRONICS LTD. (2008) 220 CTR (DEL). THE LD.DE PARTMENTAL REPRESENTATIVE ALSO AGREED WITH THE SUBMISSIONS OF THE LD. AUTHORI SED REPRESENTATIVE OF THE ASSESSEE. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. AT THE TIME OF HEARING, BOTH THE PARTIES AGREED THAT THE ISSUE NOW STANDS COVERE D BY THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCO ME TAX VS. VINAY CEMENT LTD. (2007) 213 CTR (SC) 268, WHEREIN IT HAS BEEN HELD THAT CONTRIBUTION MADE TO PROVIDENT FUND BEFORE FILING OF THE RETURN COULD NOT BE DISALLOWED UNDER SECTION 43B OF THE ACT AS IT STOOD PRIOR TO THE AMENDMENT W.E.F. 1ST APRIL, 2004. FURTHER, THE HON'BLE DELHI HIGH COUR T IN THE CASE COMMISSIONER OF INCOME TAX VS. P.M. ELECTRONICS LTD. (2008) 2 20 CTR (DEL) 635 : (2009) 177 TAXMAN 1 : (2008) 15 DTR 258, WHILE DECIDING TH E QUESTION WHETHER AMOUNTS PAID ON ACCOUNT OF PF/ESI AFTER DUE DATE ARE ALLOWABLE IN VIEW OF SECTION 43B R/W S. 36(1)(VA) OF THE ACT, HELD THAT PAYMENT OF PF CONTRIBUTION MADE BY THE ASSESSEE, AFTER THE DUE DATE PRESCRIBED UNDER THE EMPLOYEES ITA NO.1341/AHD /2003 THE ACIT VS. UMEDICA LABORATORIES LTD. ASST.YEAR - 2000-01 - 6 - PROVIDENT FUND ACT AND THE RULES MADE THEREUNDER, B UT BEFORE THE DUE DATE OF FILING OF RETURN COULD NOT BE DISALLOWED UNDER SECT ION 43B OF THE ACT. IN VIEW OF THE ABOVE, WE CONFIRM THE ORDER OF THE LD.CIT(AP PEALS) AND DELETE THE ADDITION OF RS.2,61,453/- ON ACCOUNT LATE PAYMENT OF CONTRIBUTION TO PF/ESI. THUS, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLO WED. 13. GROUND NO.3 OF APPEAL OF THE REVENUE READS AS UNDER:- 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED LD.CIT(APPEALS) HAS ERRED IN ALLOWING RS.1, 86,184/- ON ACCOUNT OF BAD DEBTS. 14. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS ING OFFICER OBSERVED THAT THE ASSESSEE HAS ONLY FURNISHED THE NAME OF THE PAR TIES AND NO DETAILS REGARDING ADDRESSES OR THE YEARS TO WHICH THESE DEBTS PERTAIN TO WERE FURNISHED BY THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDINGS. HE, THEREFORE, DISALLOWED THE CLAIM FOR BAD DEBT TO THE ASSESSEE OF RS.1,86,184/- . 15. IN APPEAL BEFORE THE LD.CIT(APPEALS), THE ASSES SEE SUBMITTED THAT THE BAD DEBTS WRITTEN OFF OF RS.1,86,184/- WERE OUTSTA NDING FOR LAST SEVEN YEARS. THE DETAILS WERE MADE AVAILABLE TO THE LD.CIT(APPEA LS) AND IT WAS SUBMITTED THAT THE ASSESSING OFFICER HAS DISALLOWED DEDUCTION FOR BAD DEBT TO THE ASSESSEE ON HYPOTHETICAL GROUND WITHOUT CONSIDERING THE FACTS. THE ASSESSEE CLARIFIED THAT PROVISION FOR DOUBTFUL DEBT FOR RS.1 3.24 LACS IN THE PROFIT & LOSS ACCOUNT WAS ADDED TO THE TOTAL INCOME OF THE ASSESS EE AND HAS NOT BEEN CLAIMED ITA NO.1341/AHD /2003 THE ACIT VS. UMEDICA LABORATORIES LTD. ASST.YEAR - 2000-01 - 7 - AS BAD DEBT WRITTEN OFF. THE ASSESSEE HAD SMALL B ILLS WHICH WERE NOT RECOVERABLE FOR LAST SEVEN YEARS AMOUNTING TO RS.1, 86,184/- WERE WRITTEN OFF AND SUCH CLAIM OF THE ASSESSEE CANNOT BE DISALLOWED . 16. THE LD.CIT(APPEALS), AFTER CONSIDERING THE SUBM ISSION OF THE ASSESSEE HELD THAT MERE WRITING OFF OF AMOUNT AS BAD DEBT WA S SUFFICIENT AND THAT THE DEBT WRITTEN OFF PERTAINS TO THE BUSINESS OF THE A SSESSEE WAS NOT IN DISPUTE. THEREFORE, HE DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 17. THE LD.DEPARTMENTAL REPRESENTATIVE SUPPORTED T HE ORDER OF THE ASSESSING OFFICER, WHEREAS LD. AUTHORISED REPRESENT ATIVE OF THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(APPEALS). 18. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. THE ASSESSEE CLAIMED BAD DEBTS OF RS.1,86,184/- WHICH WAS DISALLOWED BY THE ASSESSING OFFICER. IN APPEAL, THE LD.CIT(APPEALS) OBSERVING THAT THE A MOUNTS WERE SMALL AND WERE OUTSTANDING FOR LAST MORE THAN SEVEN YEARS AND THE ASSESSEE HAS WRITTEN OFF THE SAID AMOUNTS AS IRRECOVERABLE IN THE BOOKS OF ACCOUNT AND, THEREFORE, DELETED THE DISALLOWANCE. BEFORE US, THE REVENUE COULD NOT CONTROVERT THE FINDING OF THE LD.CIT(APPEALS). WE FIND THAT IT IS NOT IN DISPUTE THAT THE DEBTS UNDER CONSIDERATION WERE THE BUSINESS DEBTS O F THE ASSESSEE AND THE SAME WAS WRITTEN OFF AS IRRECOVERABLE IN THE BOOKS OF AC COUNT OF THE ASSESSEE AND ITA NO.1341/AHD /2003 THE ACIT VS. UMEDICA LABORATORIES LTD. ASST.YEAR - 2000-01 - 8 - SUCH DEBTS WERE OUTSTANDING AS UNREALIZED IN THE BO OKS OF THE ASSESSEE FOR LAST SIX TO SEVEN YEARS. WE, THUS, DO NOT FIND ANY ERR OR IN THE ORDER OF THE LD.CIT(APPEALS) IN DELETING THE ABOVE DISALLOWANCE. THEREFORE, THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 19. GROUND NO.4 OF APPEAL OF THE REVENUE READS AS UNDER:- 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED LD.CIT(APPEALS) HAS ERRED IN ALLOWING EXCIS E DUTY ON CLOSING STOCK RS.84,216/-. 20. THE BRIEF FACTS OF THE CASE ARE THAT WHILE VALU ING THE CLOSING STOCK, THE ASSESSEE HAD NOT CONSIDERED EXCISE DUTY PAID ON STO CK. THE ASSESSING OFFICER RELYING ON THE DECISION OF THE HON'BLE SUPREME COUR T IN THE CASE OF BRITISH PAINTS 144 ITR 28 (SC) INCLUDED THE AMOUNT OF RS.84,216/- IN THE CLOSING STOCK AND MADE ADDITION TO THE INCOME OF THE ASSESS EE. 21. IN APPEAL, THE LD.CIT(APPEALS) DIRECTED THE ASS ESSING OFFICER TO VERIFY IF EXCISE DUTY WAS INCLUDED IN THE CLOSING STOCK, T HEN ADDITION OF RS.84,216/- AS CLAIMED BY THE ASSESSEE SHOULD NOT BE MADE TO THE INCOME OF THE ASSESSEE. 22. THE LD.AUTHORISED REPRESENTATIVE OF THE ASSESSE E SUPPORTED THE ORDER OF THE CIT(APPEALS), WHEREAS THE LD.DEPARTMENTAL R EPRESENTATIVE SUPPORTED THE ORDER OF THE ASSESSING OFFICER. ITA NO.1341/AHD /2003 THE ACIT VS. UMEDICA LABORATORIES LTD. ASST.YEAR - 2000-01 - 9 - 23. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. IN THE INSTANT CASE, THE ASSESSING OFFICER ADDED RS.84,216/- TO THE INCO ME OF THE ASSESSEE ON THE GROUND THAT AMOUNT OF EXCISE DUTY WAS NOT INCLUDED IN THE VALUATION OF CLOSING STOCK. BEFORE THE LD.CIT(APPEALS), THE ASSESSEE C ONTENDED THAT EXCISE DUTY WAS ALREADY INCLUDED IN THE VALUE OF CLOSING STOCK AND, THEREFORE, AGAIN INCLUSION OF RS.84,216/- TANTAMOUNTS TO DOUBLE IN CLUSION OF EXCISE DUTY. IN VIEW OF THIS, THE LD.CIT(APPEALS) HAS OBSERVED AS U NDER:- 6.3. I FIND SUFFICIENT MERIT IN THE CONTENTION OF THE APPELLANT. IN MY VIEW IT WILL BE PROPER FOR THE ASSESSING OFFICER TO VERIFY AS TO WHETHER SUCH AMOUNT OF EXCISE DUTY OF RS.84,216/- HAS BEEN INCLUDED IN THE CLOSING STOCK AS HAS BEEN CLAIMED BY THE APPELLANT. IF IT HAS BEEN INCLUDED THEN OBVIOUSLY THERE WILL BE NO JUSTIFICAT ION FOR MAKING SUCH ADDITION IN THE CLOSING STOCK. SUBJECT TO VERIFIC ATION BY THE ASSESSING OFFICER THIS ADDITION OF RS.84,216/- IS HEREBY DELE TED. 24. BEFORE US, THE LD.DEPARTMENTAL REPRESENTATIVE COULD NOT POINT OUT WHAT WAS THE GRIEVANCE OF THE REVENUE IN RESPECT OF THE ABOVE ORDER OF THE LD.CIT(APPEALS). WE DO NOT FIND ANY ERROR IN THE OR DER OF THE LD.CIT(APPEALS) AND, THEREFORE, THIS GROUND OF APPE AL OF THE REVENUE IS REJECTED. 25. GROUND NO.5 OF APPEAL OF THE REVENUE READS A S UNDER:- 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE IN LAW, THE LEARNED LD.CIT(APPEALS) HAS ERRED IN ALLOWING ASSES SEES CLAIM FOR DEDUCTION U/S.80-HHC. ITA NO.1341/AHD /2003 THE ACIT VS. UMEDICA LABORATORIES LTD. ASST.YEAR - 2000-01 - 10 - 26. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SING OFFICER DISALLOWED DEDUCTION U/S.80HHC OF THE I.T. ACT, 1961 ON BANK I NTEREST OF RS.4,58,115/-. 27. IN APPEAL, THE LD.CIT(APPEALS) OBSERVED THAT 90 % OF INTEREST INCOME WAS TO BE EXCLUDED WHILE COMPUTING DEDUCTION U/S.80 HHC OF THE I.T. ACT, 1961. HE, THEREFORE, HELD THAT THERE WAS NO INFIRM ITY IN THE ORDER OF THE ASSESSING OFFICER IN EXCLUDING THE INTEREST WHILE C ALCULATING DEDUCTION U/S.80- HHC OF THE I.T. ACT, 1961. THE LD.CIT(APPEALS), F URTHER OBSERVED THAT THE ASSESSING OFFICER HAS WRONGLY DEDUCTED THE ENTIRE A MOUNT OF INTEREST, WHEREAS DEDUCTION SHOULD BE RESTRICTED TO ONLY 90% OF INTER EST INCOME, I.E. 90% OF RS.4,58,115/-. ACCORDINGLY, HE DIRECTED THE ASSES SING OFFICER TO RE-WORK THE DEDUCTION U/S.80HHC OF THE I.T. ACT, 1961. 28. THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE S UPPORTED THE ORDER OF THE CIT(APPEALS), WHEREAS THE DEPARTMENTAL REPRESEN TATIVE SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 29. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. IN THE INSTANT CASE, THE ISSUE WHICH REQUIRES OUR ADJUDICATION IS THAT WHETH ER THE ENTIRE INTEREST INCOME OF RS.4,58,115/- IS TO BE EXCLUDED FOR COMPUTING DE DUCTION ALLOWABLE ITA NO.1341/AHD /2003 THE ACIT VS. UMEDICA LABORATORIES LTD. ASST.YEAR - 2000-01 - 11 - U/S.80HHC OF THE I.T. ACT, 1961 OR ONLY 90% OF SUCH INTEREST IS TO BE EXCLUDED AS HELD BY THE LD.CIT(APPEALS). WE FIND FROM THE ORDER OF THE ASSESSMENT THAT INTEREST INCOME OF RS.4,58,115/- WAS NOT ASSE SSED SEPARATELY UNDER THE HEAD INCOME FROM OTHER SOURCES BY THE ASSESSING O FFICER, BUT THE ASSESSING OFFICER HAS ACCEPTED THE INTEREST INCOME AS PART OF BUSINESS INCOME OF THE ASSESSEE. ON THE ABOVE FACTS, IN VIEW OF THE EXP LANATION (BAA) TO SECTION 80HHC OF THE I.T. ACT, 1961, IN OUR CONSIDERED OPIN ION, THE LD.CIT(APPEALS) WAS FULLY JUSTIFIED IN DIRECTING THE ASSESSING OFFI CER TO EXCLUDE ONLY 90% OF SUCH INTEREST INCOME FOR COMPUTING THE DEDUCTION AL LOWABLE U/S.80HHC. THEREFORE, THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 30. GROUND NO.6 OF APPEAL OF THE REVENUE READS AS UNDER:- 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED LD.CIT(APPEALS) OUGHT TO HAVE UPHELD THE AS SESSMENT ORDER OF THE ASSESSING OFFICER PASSED U/S.143(3) OF THE I.T. ACT, DTD 18.11.2002. 31. THE ABOVE GROUND IS GENERAL IN NATURE REQUIRE S NO ADJUDICATION BY US. 32. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 28/08/2009. SD/- SD/- ( T.K. SHARMA ) ( N.S. SAINI ) JUDICIAL MEMBER A CCOUNTANT MEMBER AHMEDABAD; DATED 28/08/2009 T.C. NAIR ITA NO.1341/AHD /2003 THE ACIT VS. UMEDICA LABORATORIES LTD. ASST.YEAR - 2000-01 - 12 - COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-VALSAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD