Court dismisses appeal, excludes excise duty & sales-tax receipts from turnover for deductions. Interest on deposits not deductible.

The appeal against the Income Tax Appellate Tribunal's judgment for the Assessment Year 1995-96 was dismissed. The Court held that excise duty and sales-tax receipts should not be included in the total turnover for deductions under Section 80HHC of the Act, in line with precedent. Additionally, interest earned on deposits should not be considered for deductions under Section 80IA, following previous rulings. The Court ruled against the revenue on both issues, leading to the dismissal of the appeal without costs.

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Issues:
1. Appeal against the judgment passed by the Income Tax Appellate Tribunal for the Assessment Year 1995-96.
2. Interpretation of whether excise duty and sales-tax receipts should be considered in the total turnover for the purpose of deduction under Section 80HHC of the Act.
3. Interpretation of whether interest earned on deposit should be included for the purpose of deduction under Section 80IA.

Analysis:
1. The appellant, dissatisfied with the ITAT's judgment for the Assessment Year 1995-96, raised two substantial questions of law. The first issue revolved around whether excise duty and sales-tax receipts should be included in the total turnover for calculating deductions under Section 80HHC of the Act. The Court referred to a Supreme Court decision in the case of Commissioner of Income-tax Vs. Lakshmi Machine Works, which ruled against the revenue. The appellant's counsel did not dispute this, leading to the Court answering the first question against the revenue.

2. The second issue concerned whether interest earned on deposits should be considered for the purpose of deduction under Section 80IA. The Court modified the question and examined if the ITAT erred in including interest earned on deposits for deduction under Section 80IA. The ITAT's decision was based on a ruling by the Special Bench of the ITAT, Delhi, which was later approved by the Supreme Court in the case of ACG Associated Capsules Pvt. Ltd. Vs. Commissioner of Income-tax. The appellant's counsel did not dispute this, resulting in the Court ruling against the revenue on this issue as well.

3. Consequently, the Court dismissed the appeal, stating that both questions were decided against the revenue. The judgment highlighted the precedents set by the Supreme Court in similar cases, leading to the dismissal of the appeal without any costs incurred.

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