M/s. JINDAL DRUGS LTD., MUMBAI V. ACIT Rg. - 3(2), MUMBAI

ITA 139/MUM/2007

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8195 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 26-08-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 05-01-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S D SHRIVASTAVA
• Keywords: Business income
• Section: 143(3); 80HHC

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL J , BENCH MUMBAI , BEFORE : SHRI R.C.SHARMA , A M & SHRI SANJAY GARG, J M ITA NO. 139 / MUM/20 07 ( ASSESSMENT YEAR : 200 3 - 0 4 ) M/S JINDAL DRUGS LTD. , BAKHTAWAR, 6 TH FLOOR, B&C, 229, NARIMAN POINT, MUMBAI - 21 VS. ACIT , RG.3(2) , MUMBAI - 20 PAN/GIR NO. : A A ACJ 1000 A ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : SHRI ASHOK MEHTA /REVENUE BY : SHRI S.D.SHRIVASTAVA DATE OF HEARING : 2 6 TH AUGUST , 201 4 DATE OF PRONOUNCEMENT : 26/08/ 201 4 O R D E R PER R.C.SHARMA ( A .M.) : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER CIT(A ) , DATED 31 - 10 - 2006 FOR THE ASSESSMENT YEAR 200 3 - 0 4 , IN THE MATTER OF ORDER PASSED U/S. 143(3) R.W.S.147 OF TH E ACT . IN THIS CASE, THE TRIBUN AL PASSED THE ORDER ON 24 - 12 - 2009, WHEREIN ISSUE WITH REGARD TO ALLOWING DEDUCTION U/S. 80HHC AFTER EXCLUDING ON THE NET AMOUNT OF INTEREST FROM ELIGIBLE INCOME WAS HELD IN FAVOUR OF THE ASSESSEE. THE REVENUE APPROACHED TO THE HIGH COURT AND THE HONBLE HIG H COURT VIDE ITS ORDER DATED 17 - 6 - 2011 RESTORED THE MATTER TO THE FILE OF THE ITAT FOR DE NOVO CONSIDERATION ON THE BASIS OF QUESTION RAISED IN THE APPEAL. THE QUESTION RAISED BEFORE THE HIGH COURT READS AS UNDER :_ ITA NO.139/07 2 WHETHER ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE AND IN LAW, THE HON BLE ITAT WAS JUSTIFIED IN HOLDING THAT NET AMOUNT OF INTEREST BE DEDUCTED FROM THE PROFIT OF BUSINESS TO WORK OUT DEDUCTION UNDER SECTION 80HHC OF THE INCOME TAX ACT, 1961? 2 . WE HAVE CONSIDERED RIVAL CONTENTIONS A ND PERUSED THE RECORD. WE FOUND THAT T HE ISSUE WITH REGARD TO COMPUTATION OF DEDUCTION U/S. 80HHC WITH RESPECT TO EXCLUSION OF THE INTEREST INCOME FROM ELIGIBLE BUSINESS INCOME HAS BEEN DECIDED BY THE H O N BLE SUPREME COURT IN THE CASE OF ACG ASSOCIATED CAPS ULES PVT. LTD. VS. CIT, REPORTED IN (2012) 343 ITR 89 (SC) , WHEREIN IT HAS BEEN HELD THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S. 80HHC AFTER EXCLUDING NET INTEREST INCOME AND NOT GROSS INTEREST INCOME FROM THE ELIGIBLE INCOME OF THE ASSESSEE. THE RELEVANT OBSERVATION OF THE HONBLE APEX COURT IS AS UNDER: - N INETY PER CENT OF THE NET INTEREST OR NET RENT WHICH HAS BEEN INCLUDED IN THE PROFITS OF THE ASSESSEE AS COMPUTED UNDER THE HEAD 'PROFITS AND GA INS OF BUSINESS OR PROFESSION' AND NOT THE GROSS INTEREST OR GROSS RENT, IS TO BE DEDUCTED UNDER CLAUSE (1) OF EXPLANATION (BAA) TO SECTION 80HHC FOR DETERMINING THE PROFITS OF THE BUSINESS. RESPECTFULLY FOLLOWING THE PROPOSITION OF LAW LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF ACG ASSOCIATED CAPSU LES PVT. LTD (SUPRA), WE ALLOW THE APPEAL OF THE ASSESSEE AND DIRECT THE AO TO REDUCE THE NET AMOUNT OF INTEREST FROM THE ELIGIBLE INCOME OF ASSESSEE FOR COMPUTING DEDUCTION U/S.80 HHC . 3 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26/08/ 201 4 . 26/08/ 2014 SD/ - SD/ - ( ) ( SANJAY GARG ) ( ) ( R.C.SHARMA ) / JUDICIAL MEM BER / ACCOUNTANT MEMBER MUMBAI ; DATED 26/08 /2014 /PKM , PS ITA NO.139/07 3 COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//