Himalaya Machinery Pvt.Ltd., Baroda V. The ACIT.,Circle-1(2), Baroda

ITA 4497/AHD/2007

• Counselvise Citation: 449720514 RSA 2007
• Duration Of Justice: 4 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 02-12-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 24-12-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAMES KURAIN
• Assessee Lawyers: J P SHA SRAR
• Keywords: Gift; Business income; Depreciation
• Section: 80HHC

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD .., .. , ! BEFORE SHRI D.K. TYAGI, HONBLE JUDICIAL MEMBER AND SHRI A.K.GARODIA, HONBLE ACCOUNTANT MEMBER ITA NO.4497 & 4567/AHD/2007 ASSESSMENT YEAR:2004-05 HIMALAYA MACHINERY PVT. LTD., 608, GIDC ESTATE MAKARPURA, BARODA 390 010 PAN NO.AABCH0034K ACIT, CIR-1(2), AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA V/S. V/S. ASSTT. CIT- CIRCLE-1(2), BARODA M/S HIMALAYA MACHINERY PVT. LTD. 608, GIDC ESTATE, MAKARPURA, BARODA (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI J.P. SHA, SR-AR REVENUE BY:- SHRI JAMES KURAIN, DR DATE OF HEARING 02-12-2011 DATE OF PRONOUNCEMENT 19 -01-2012 ' ' ' ' /O R D E R PER A.K. GARODIA, ACCOUNTANT MEMBER:- BOTH APPEALS ARE CROSS-APPEAL FILED BY THE ASSESSE E AND REVENUE DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-I BARODA DATED 28- 09-2007 FOR THE ASSESSMENT YEAR 2004-05 AND FOR THE SAKE OF CONVENIENCE, BOTH ARE BEING DISPOSED OFF BY WAY OF THIS COMMON ORDER. FIRST WE TAKE UP THE APPEAL OF ASSESSEE IN ITA NO.4 497/AHD/2007. ITA NO.4497 &4567/AHD/2007 A .Y. 2004-05 HIMALAYA MACHINERY P. LTD. V. ACIT CIR-1(2) BRD PAGE 2 2. GROUND NO.1 IS REGARDING DISALLOWANCE OF RS.3 LA KH PAID TO DIRECTORS ON ACCOUNT OF GUARANTEE COMMISSIONS. 3. IT WAS SUBMITTED BY LD. AR OF THE ASSESSEE THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF TRIBUNAL RENDERED IN THE ASSESSE ES OWN CASE FOR AY 2006-07 IN ITA NO.738/AHD/2009 DATED 05-06-2009. HE SUBMITTED A COPY OF THE TRIBU NAL ORDER. 4. LD. DR OF THE REVENUE SUPPORTED THE ORDERS OF AU THORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIALS ON RECORD AND GONE THROUGH THE TRIBUNAL ORDER CITED BY LD. AR OF THE ASSESSEE. WE FIND THAT IN THAT YEAR ALSO, THE ISSUE INVOLVED BEFORE THE TRIBU NAL WAS SAME I.E. DISALLOWANCE OF GUARANTEE COMMISSIONS PAID TO DIRECTORS ON ACCOUNT OF GUARANTEE GIVEN BY THEM TO THE BANK. THE TRIBUNAL HAS FOLLOWED THE JUDGMENT OF HONBLE RAJASTHAN HIGH COURT RENDERED IN THE CASE OF CIT V. METALIZING EQUIPMENT CO. (P) LTD. (2008) AS REPORTED 8 DTR 12 (RAJ) AND DECIDED THE ISSUE IN FAVOUR OF T HE ASSESSEE. SINCE NO DIFFERENCE IN FACTS COULD BE POINTED OUT BY LD. DR OF THE REVE NUE, WE DO NOT FIND ANY REASON TO TAKE A CONTRARY VIEW IN THE PRESENT YEAR AND HENCE, BY RESPECTFULLY FOLLOWING THE PRECEDENT, WE DECIDE THE ISSUE IN FAVOUR OF ASSESSE E IN THIS YEAR ALSO. GROUND NO.1 OF THE ASSESSEES APPEAL IS ALLOWED. 6. GROUND NO.2 & 3 ARE INTER-CONNECTED. AS PER GROU ND NO.2, THE GRIEVANCE OF THE ASSESSEE IS THAT INTEREST INCOME OF RS.21,00512 /- SHOULD NOT BE ASSESSED AS INCOME FROM OTHER SOURCES. AS PER GROUND NO.3, THE GRIEVANCE OF ASSESSEE IS THAT EVEN IF INTEREST INCOME IS ASSESSED AS INCOME FROM OTHER SOURCES, THEN ONLY NET RECEIPT SHOULD BE ASSESSED AS INCOME FROM OTHER SOU RCES. 7. REGARDING GROUND NO.2, VARIOUS JUDGMENTS ARE REF ERRED BY LD. AR OF THE ASSESSEE IN THE CHART SUBMITTED BY HIM BUT IN COURS E OF HEARING BEFORE US, NO ATTENTION WAS DRAWN TOWARDS THESE JUDGMENTS WHEN IT WAS POINTED OUT BY THE BENCH THAT THIS ISSUE IS COVERED AGAINST ASSESSEE BY THE JUDGMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT V. SHRI RAM HONDA POWER EQUIP (2007) AS ITA NO.4497 &4567/AHD/2007 A .Y. 2004-05 HIMALAYA MACHINERY P. LTD. V. ACIT CIR-1(2) BRD PAGE 3 REPORTED IN 289 ITR 475 (DEL). HE ONLY SUBMITTED TH AT THIS FD WAS REQUIRED FOR THE PURPOSE OF PLACING WITH BANK AS MARGIN MONEY FOR AV AILING BANK OVER-DRAFT / BANK GUARANTEE FACILITIES AT CONCESSIONAL BANK CHARGES. REGARDING GROUND NO.3 I.E. NEETING OF INTEREST INCOME, RELIANCE PLACED ON THIS VERY JUDGMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF SHRI RAM HONDA POWER EQUIP (SUPRA) AND ALSO ON ANOTHER JUDGEMENT OF HONBLE DELHI HIGH COURT RE NDERED IN THE CASE OF CIT V.PAWAN KUMAR JAIN (2008) AS REPORTED IN 298 ITR 443 (DEL). 8. LD. DR OF THE REVENUE SUPPORTED THE ORDERS OF AU THORITIES BELOW ON BOTH THE ISSUES. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AN D JUDGMENTS CITED BY LD. AR OF THE ASSESSEE. WE FIND THAT IN THE CASE OF SHRI RAMA HONDA POWER EQUIP (SUPRA), BOTH THE ISSUES WERE BEFORE HONBLE DELHI HIGH COUR T AS WHETHER THE INTEREST INCOME IS ASSESSABLE AS INCOME FROM BUSINESS OR INCOME FRO M OTHER SOURCES AND WHETHER NEETING SHOULD BE ALLOWED OR NOT. ON THE FIRST ASPE CT, IT WAS HELD BY HONBLE DELHI HIGH COURT THAT EVEN IF INTEREST IS EARNED ON FIXED DEPOSITS FOR THE PURPOSE OF AVAILING OF CREDIT FACILITIES FROM THE BANK, IT DOES NOT HAV E A NEXUS WITH THE EXPORT BUSINESS AND THEREFORE, HAS TO NECESSARILY BE TREATED AS INC OME FROM OTHER SOURCES AND NOT BUSINESS INCOME. THEY HAVE ALSO ADDED A CAVET AS PE R WHICH, IF IN A GIVEN CASE, THE ASSESSING OFFICER HAS HELD THAT INTEREST INCOME IS BUSINESS INCOME AND THIS ASPECT HAS NOT BEEN CHALLENGED BY THE DEPARTMENT, THEN THA T QUESTION CAN NOT TO BE PERMITTED TO BE RE-OPENED AND THEN THE ONLY QUESTIO N WILL BE IF NETTING SHOULD BE ALLOWED. SINCE THIS ASPECT IS SQUARELY COVERED IN F AVOUR OF REVENUE AND AGAINST THE ASSESSEE BY THE JUDGMENT OF HONBLE DELHI HIGH COUR T, WE DECIDE THIS ASPECT AGAINST THE ASSESSEE AND GROUND NO.2 OF THE ASSESSE E IS REJECTED BECAUSE IN THE PRESENT CASE, THE AO HAS TREATED THE INTEREST INCOM E AS INCOME FROM OTHER SOURCES. 10. ON NETTING ASPECT I.E. REGARDING GROUND NO.3, I T IS HELD BY HONBLE DELHI HIGH COURT IN THIS VERY CASE THAT TO THE EXTENT THE ASSE SSEE CAN ESTABLISH THE NEXUS BETWEEN INTEREST PAYMENT AND INTEREST INCOME BY SHO WING THAT INTEREST EXPENSE WAS INCURRED FOR THE PURPOSE OF EARNING INTEREST INCOME THEN TO THAT EXTENT NETTING SHOULD BE ALLOWED AND ONLY SUCH NET INTEREST INCOME SHOULD BE CONSIDERED FOR EXCLUSION TO ITA NO.4497 &4567/AHD/2007 A .Y. 2004-05 HIMALAYA MACHINERY P. LTD. V. ACIT CIR-1(2) BRD PAGE 4 THE EXTENT 90% FROM BUSINESS PROFIT AS PER CLAUSE ( BAA) OF THE EXPLANATION TO U/S 80HHC. HENCE, IN THE PRESENT CASE ALSO, WE DECIDE T HIS ISSUE ACCORDINGLY. BY RESPECTFULLY FOLLOWING THIS JUDGMENT OF HONBLE DEL HI HIGH COURT, WE DIRECT THE ASSESSING OFFICER TO ALLOW THE NETTING TO THE ASSES SEE, IF THE ASSESSEE CAN ESTABLISH NEXUS BETWEEN INTEREST INCOME AND INTEREST EXPENSE BY SHOWING THAT INTEREST EXPENSE WAS INCURRED FOR EARNING INTEREST INCOME. A CCORDINGLY, GROUND NO.3 OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AS PER ABOVE DISCUSSION. 11. GROUND NO.4, 5 AND 6 ARE INTER-CONNECTED. AS PE R GROUND NO.4, THE GRIEVANCE OF THE ASSESSEE IS THAT SERVICE CHARGES INCOME SHOU LD BE EXCLUDED FROM TOTAL TURNOVER FOR THE PURPOSE OF DEDUCTION U/S.80HHC. AS PER GROUND NO.5 THE GRIEVANCE OF THE ASSESSEE IS THAT 90% OF AFTER SALES SERVICE CHARGES OF RS.8,23,212/- SHOULD NOT BE EXCLUDED FROM BUSINESS PROFIT BY INVOKING TH E PROVISIONS OF CLAUSE (BAA) TO SECTION 80HHC. AS PER GROUND NO.6, THE GRIEVANCE OF THE ASSESSEE IS THAT EVEN IF AFTER SALES SERVICE CHARGES OF RS.8,23,212/- IS HEL D TO BE HIT BY EXPLANATION (BAA) TO SECTION 80HHC, INSTEAD OF GROSS AMOUNT OF AFTER SAL ES SERVICE CHARGES, ONLY NET AMOUNT THEREOF SHOULD BE CONSIDERED FOR EXCLUSION. 12. ON THIS ASPECT, IT WAS POINTED OUT BY THE BENCH THAT ON THIS ASPECT, THE ENTIRE ISSUE IS COVERED AGAINST THE ASSESSEE BY THE JUDGME NT OF HONBLE APEX COURT RENDERED IN THE CASE OF CIT V. K RAVINDRANATHAN NAIR (2007) AS REPORTED IN 295 ITR 228 (SC). IN REPLY, LD. AR OF THE ASSESSEE HAD NOTH ING TO SAY AS TO HOW THIS JUDGMENT OF HONBLE APEX COURT IS NOT APPLICABLE IN THE PRESENT CASE ON ALL THESE ISSUES BUT HE SUBMITTED THAT AT LEAST NETTING SHOUL D BE ALLOWED AS PER GROUND NO.6 OF APPEAL. 13. LD. DR SUPPORTED THE ORDERS OF AUTHORITIES BELO W. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AN D JUDGMENT OF HONBLE APEX COURT IN THE CASE OF K. RAVINDRANATHAN NAIR (SUPRA). IN THAT CASE, THE ISSUE BEFORE THE HONBLE APEX COURT WAS WHETHER THE PROCESSING CHARG ES RECEIPT IS TO BE INCLUDED IN TOTAL TURNOVER OR NOT FOR THE PURPOSE OF COMPUTING DEDUCTION U/S.80HHC AND THIS WAS ALSO DISPUTED BEFORE HONBLE APEX COURT AS TO WHETH ER SUCH PROCESSING CHARGES ARE ITA NO.4497 &4567/AHD/2007 A .Y. 2004-05 HIMALAYA MACHINERY P. LTD. V. ACIT CIR-1(2) BRD PAGE 5 HIT BY THE EXPLANATION (BAA) TO SECTION 80HHC. IT W AS HELD BY HONBLE APEX COURT THAT SUCH PROCESSING CHARGES ARE HIT BY CLAUSE (BAA ) OF EXPLANATION TO SECTION 80HHC AND THEREFORE 90% OF THE SAME SHOULD BE EXCLU DED FROM THE BUSINESS PROFIT AND SUCH RECEIPTS SHOULD ALSO BE INCLUDED IN TOTAL TURNOVER FOR THE PURPOSE OF COMPUTING DEDUCTION ALLOWABLE TO THE ASSESSEE U/S.8 0HHC. BY RESPECTFULLY FOLLOWING THIS JUDGMENT OF HONBLE APEX COURT, GROUND NO.4 AN D 5 OF THE ASSESSEE ARE REJECTED. 15. REGARDING GROUND NO.6 I.E. REGARDING THE CLAIM FOR ASSESSEE FOR NETTING OF EXPENSE AGAINST THE RECEIPT OF AFTER SALES SERVICE CHARGES OF RS.8,32,212/-, WE FEEL THAT THE SAME JUDGMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF SHRI RAMA HONDA POWER EQUIP (SUPRA) SHOULD BE FOLLOWED AND TO THE EXTENT, THE ASSESSEE CAN PROVE DIRECT NEXUS OF ANY EXPENSES INC URRED FOR EARNING THIS AFTER SALES SERVICE CHARGES, NETTING SHOULD BE ALLOWED AN D ONLY SUCH NET SERVICE CHARGES SHOULD BE CONSIDERED FOR EXCLUDING 90% FROM BUSINES S PROFIT AS PER EXPLANATION (BAA) TO SECTION 80HHC. GROUND NO.6 OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 16. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALL OWED. NOW WE TAKE UP THE REVENUES APPEAL IN ITA NO.4567/ AHD/2007. 17. AS PER GROUND NO.1, THE GRIEVANCE OF THE REVENU E IS REGARDING DELETION OF DISALLOWANCE OF RS.40,526/- MADE BY THE ASSESSING O FFICER ON DISTRIBUTION OF FOOD- RAINS AND DELETION OF DISALLOWANCE OF RS.21,252/- M ADE BY AO ON ACCOUNT OF GIFTS TO EMPLOYEES ON THE OCCASION OF BIRTHDAY AND MARRIAGE. LD. DR OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER, WHEREAS LD. AR OF T HE ASSESSEE SUPPORTED THE ORDER OF LD. CIT(A). 18. WE FIND THAT ISSUE HAS BEEN DECIDED BY LD. CIT( A) AS PER PARA-9 OF HIS ORDER, WHICH IS REPRODUCED BELOW:- ITA NO.4497 &4567/AHD/2007 A .Y. 2004-05 HIMALAYA MACHINERY P. LTD. V. ACIT CIR-1(2) BRD PAGE 6 9. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS OBSERVED THAT THE ASSESSING OFFICER HA SNOT DOUBTED THE GENUINENESS OF THE EXPE NDITURE. THE DISALLOWANCE HAS BEEN MADE ON THE BASIS OF BUSINESS EXPEDIENCY. IT HAS NOT BEEN DENIED BY THE ASSESSING OFFICER THAT THE EXPENDITURE WAS I NCURRED ON BIRTHDAY AND MARRIAGES OF THE EMPLOYEES OF THEIR FAMILY MEMBERS OR THAT THE FOOD GRAINS WERE DISTRIBUTION TO THE EMPLOYEES. IN THIS CIRCUMS TANCES, THE EXPENDITURE INCURRED UNDER THE WELFARE SCHEME FOR ITS EMPLOYEES TO PROMOTE EMPLOYER EMPLOYEE RELATIONSHIP IS HELD TO HAVE BEEN INCURRED IN THE INTEREST OF BUSINESS PROMOTION. THE DISALLOWANCE MADE IS, THEREFORE, CAN CELLED. 19. WE FIND THAT LD. CIT(A) HAS DELETED THESE TWO D ISALLOWANCES ON THIS BASIS THAT EXPENSES WERE INCURRED IN THE INTEREST ON BUSINESS PROMOTION AND WELFARE SCHEME OF ITS EMPLOYEES TO PROMOTE EMPLOYER - EMPLOYEE RELATI ONSHIP AND HENCE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CI T(A) ON THIS ISSUE. GROUND NO.1 OF REVENUE IS REJECTED. 20. GROUND NO.2 OF REVENUES APPEAL IS REGARDING DE LETION OF DISALLOWANCE MADE BY ASSESSING OFFICER OF RS.5,74,774/- ON CURRENT RE PAIRS OF MACHINERY. 21. ON THIS GROUND, LD DR OF THE REVENUE SUPPORTED ASSESSMENT ORDER, WHEREAS LD. AR OF THE ASSESSEE SUPPORTED THE ORDER OF LD. C IT(A). 22. WE HAVE CONSIDERED RIVAL SUBMISSIONS, PERUSED T HE MATERIALS AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND TH AT THIS ISSUE HAS BEEN DECIDED OF LD. CIT(A) AS PER PARA-11 OF HIS ORDER, WHICH IS AS UNDER:- 11. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS OBSERVED THAT THE REPAIRS AND OVERHAULING OF THE MACHINES IS IN THE NATURE OF CURRENT REPAIRS AIMED AT PRESERVING AND MAINTAINING THE ALREADY EXISTING MAC HINES. NO NEW ASSETS HAVE COME INTO EXISTENCE NOR IS THIS THE PROPOSITIO N OF THE ASSESSING OFFICER. UNDER THE CIRCUMSTANCES, THE EXPENDITURE INCURRED B Y THE APPELLANT IS HELD TO BE REVENUE IN NATURE. THE DISALLOWANCE MADE IS CANC ELLED. THE ASSESSING OFFICER IS DIRECTED TO WITHDRAW DEPRECIATION ALREAD Y ALLOWED WHILE GIVING EFFECT TO THIS ORDER. 23. IN VIEW OF THIS CLEAR FINDING OF LD. CIT(A) THA T THE EXPENDITURE INCURRED WERE FOR REPAIRS AND OVERHAULING OF ASSETS AND HENCE, IS IN THE NATURE OF CURRENT REPAIRS, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) OF THIS ISSUE ALSO ITA NO.4497 &4567/AHD/2007 A .Y. 2004-05 HIMALAYA MACHINERY P. LTD. V. ACIT CIR-1(2) BRD PAGE 7 BECAUSE LD. DR OF THE REVENUE COULD NOT CONTROVERT THIS FINDING OF LD. CIT(A). GROUND NO.2 OF REVENUE IS ALSO REJECTED. 24. AS PER GROUND NO.3, THE GRIEVANCE OF THE REVENU E IS REGARDING THE ORDER OF LD. CIT(A) AS PER WHICH, HE HAS HELD THAT NO EXCLUS ION IS REQUIRED FROM BUSINESS PROFIT ON ACCOUNT OF 90% OF INCOME FROM SELF GENERA TED ELECTRICITY AND WRITE BACK OF WARRANTY PROVISION UNDER CLAUSE (BAA) OF THE EXPLAN ATION TO SECTION 80HHC OF THE ACT. 25. ON THIS ISSUE ALSO, LD. DR OF THE REVENUE SUPPO RTED THE ASSESSMENT ORDER, WHEREAS LD. AR OF THE ASSESSEE SUPPORTED THE ORDER OF LD. CIT(A). 26. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. W E FIND THAT THIS ISSUE HAS BEEN DECIDED BY LD. CIT(A) IN PARA-17 OF HIS ORDER, WHICH IS REPRODUCED BELOW:- 17. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS OBSERVED THAT EXPLANATION (BAA) SPECIFICALLY INCLUDES THE TERMS CHARGES ALONG WITH OTHER TERMS LIKE BROKERAGE, COMMISSION ETC. UNDER THE CIRCUMSTANCES, THE AFTER SALES SERVICE CHARGES ARE CLEARLY COVERED UNDER EXPLANATION (BAA) . THE ACTION OF THE ASSESSING OFFICER IN RESPECT OF THE SAME IS, THEREF ORE, UPHELD. SIMILARLY, LEASE RENT AND COMMISSION ARE ALSO CLEARLY AND SPECIFICAL LY INCLUDED IN THE EXPLANATION (BAA). THE SAME HAVE NECESSARILY TO BE EXCLUDED. AS REGARDS INCOME ON ACCOUNT OF CREDIT FOR SELF GEN ERATED POWER, IT IS OBSERVED THAT LOOKING TO THE NATURE OF THE RECEIPT IT IS IN THE FORM OF AN INCENTIVE FOR SELF GENERATION OF POWER. THE APPELLA NT IS ACCOUNTING IT SEPARATELY AS INCOME AND NOT REDUCING IT FROM THE G EB BILLS SINCE THE GE SHOWS IT SEPARATELY AS A CREDIT. UNDER THE CIRCUMST ANCES, THIS CANNOT BE COVERED UNDER ANY OF THE ITEMS IN EXPLANATION (BAA) . UNDER THE CIRCUMSTANCES, THE EXCLUSION OF 90% OF THE SAID AMO UNT FROM THE PROFITS OF THE BUSINESS FOR THE PURPOSES OF DEDUCTION U/S.80HHC IS CANCELLED. SIMILARLY, THE WARRANTY PROVISION WRITTEN BACK AS INCOME IS ALSO H ELD TO BE NOT COVERED UNDER EXPLANATION (BAA) TO SEC. 80HHC. UNDER THE CI RCUMSTANCES, THE ACTION OF THE ASSESSING OFFICER IN EXCLUDING THE SAID AMOU NT FROM THE PROFITS OF THE BUSINESS FOR THE PURPOSES DEDUCTION U/S.80HHC IS AL SO CANCELLED. THE ASSESSING OFFICER IS DIRECTED TO RE-COMPUTE THE DED UCTION U/S.80HHC ACCORDINGLY. 27. WE FIND THAT SPECIFIC FINDING HAS BEEN GIVEN BY LD. CIT(A) THAT BOTH THE RECEIPTS ARE NOT IN THE NATURE OF VARIOUS RECEIPTS ENUMERATED IN CLAUSES (BAA) OF EXPLANATION TO SECTION 80HHC. THIS FINDING OF LD. C IT(A) COULD NOT BE CONTROVERTED ITA NO.4497 &4567/AHD/2007 A .Y. 2004-05 HIMALAYA MACHINERY P. LTD. V. ACIT CIR-1(2) BRD PAGE 8 BY THE LD. DR OF THE REVENUE AND HENCE, WE DECLINE TO INTERFERE IN THE ORDER OF LD. CIT(A) ON THIS ISSUE ALSO. GROUND NO.3 OF REVENUE I S ALSO REJECTED. 27. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 28. IN COMBINE RESULT, APPEAL OF ASSESSEE IS PARTLY ALL OWED WHEREAS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 19/01/2012 # ' $ %& '() 19 / 012012 !+ , $ - . SD/- SD/- ( .. ) ( .. ) (D.K.TYAGI) (A.K. GARODIA) ( ) ( ! ) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, *DKP '()- 19/01/2012 . ' ' ' ' $ $$ $ 012 012 012 012 32&1 32&1 32&1 32&1 / COPY OF ORDER FORWARDED TO:- 1. 56 / APPELLANT 2. 056 / RESPONDENT 3. (( 1 +9 / CONCERNED CIT 4. +9- / CIT (A) 5. 2<= 01' , , / DR, ITAT, AHMEDABAD 6. ? @# / GUARD FILE. BY ORDER/ ' , /TRUE COPY/ A/ (B , .