TaxTMI 
TaxTMI 
2004 (1) TMI 317
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....ther sources as against the claim of the appellant of the same being income from business and thereby reducing the same while giving benefit under s. 80HHC." 3. Briefly stated, the facts relevant to the aforesaid ground are as follows: The grievance of the assessee is with regard to the manner of computation of deduction under s. 80HHC. The assessee contends that it is eligible for s. 80HHC benefits in relation to the incomes of Rs. 3,21,82,000 and Rs. 3,33,00,000 representing miscellaneous receipts and dividend income on units of UTI, respectively. With regard to the component of miscellaneous receipts, it was contended before the AO that the major portion of it consisted of incomes on account of load port discharge receipts, invocation of P.G. Bonds, forfeiture of earnest money deposit, etc. The AO did not take the aforesaid income into consideration for calculation of deduction under s. 80HHC on the plea that in the absence of any headwise declaration of such expenses, the same could not be considered as receipts relatable to the profits of the assessee's business. On the issue of the dividends from the UTI, the claim of deduction under s. 80HHC was also denied on the plea....
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....ther words, in order to qualify for deduction under s. 80HHC not only the factum of making of export out ofIndiais a sine qua non condition but it is also imperative that the profits which are considered for the said deduction must also be derived by an assessee from such exports. The section also lays down the manner and computation under which such profits are to be deduced. Of course, the manner of computation is not the subject-matter of controversy before us. In order to understand as to what would constitute profits derived from the activities specified under s. 80HHC we may advert to certain well recognised judicial pronouncements on the subject. The CIT(A) has also relied upon the decision of the Hon'ble High Court of Karnataka in the case of Sterling Foods vs. CIT (1985) 47 CTR (Kar) 157 : (1984) 150 ITR 292 (Kar) to hold the issue against the assessee. The said decision has since been approved by the Hon'ble apex Court and reported as CIT vs. Sterling Foods (1999) 153 CTR (SC) 439 : (1999) 237 ITR 579 (SC). The assessee therein was engaged in processing sea food for export purposes in the course of which it earned some import entitlements granted by the Central Government....
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.... the assessee of being heard in the matter and, thereafter pass appropriate orders in accordance with law with regard to the assessee's claim for s. 80HHC. Of course, the AO shall take into consideration the legal premise as discussed by us in the aforesaid paragraphs while evaluating the claim of the assessee with regard to the miscellaneous receipts. 7. Secondly, now the claim of the assessee with regard to the dividends from UTI. In our view, the assessee has to fail on this issue for the reasons discussed hereinafter. The stand of the assessee is that income from units is liable to be treated as business income thereby qualifying for relief under s. 80HHC. In our view, merely because an income/receipt is liable to be constituted as a business income of the assessee, the same ipso facto does not qualify to be eligible for relief under s. 80HHC. Much more is required to be done so as to be eligible for the relief under s. 80HHC. The facet of a direct nexus of the said receipts vis-a-vis the business of export of assessee is absent having regard to the facts of the instant case. Although the dividend income of UTI may be a business income but it is a receipt which is de hors fr....
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....n reasonably be attributed considered as expenditure incurred for earning the dividend income. The CIT(A) relied upon his earlier year decision on the similar issue in this regard. The assessee is in further appeal before us. 10. It was contended by the learned counsel that the units of UTI which have yielded dividends were bought in 1990 out of surplus funds. Therefore, the assessee neither incurred any expenditure on account of earning this income during the year nor any interest was paid for the purposes of earning such incomes. It was also contended that there is no administrative expenses which could be said to have been incurred for earning the aforesaid incomes. Similarly, it was explained that the interest earned during the year was more than the expenditure incurred on interest and, therefore, there could not be a stand to the effect that any interest was incurred with regard to the funds deployed for purchase of units. Therefore, the entire amount of the dividend income was liable to be considered for deduction under s. 80M. 11. On the other hand, the learned Departmental Representative has vehemently defended the orders of the first appellate authority. 12. We h....
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....ving regard to the decision of the Hon'ble High Court of Kerala in the case of CIT vs. South India Corpn. Ltd. (1999) 157 CTR (Ker) 422 : (2000) 242 ITR 114 (Ker). A perusal of the facts as emerging from the orders of the lower authorities as also in the paper book do not reflect the details of the dates on which such payments have been made. Therefore, it would be inappropriate to proceed to apply the provisions of s. 43B as they stand, in the absence of requisite details. Hence, we deem it fit and proper to remit the issue back to the file of the AO who shall de novo go into this issue and verify the facts and thereafter pass appropriate orders in accordance with law on the issue. 16. For statistical reasons, the assessee succeeds on this count. 17. Briefly stated, the facts in relation to the third ground are that the assessee had certain processing contract. As the printed balance sheet indicated that the assessee had a claim of Rs. 53,50,000 against one of the processors which was not credited to its P&L a/c. The AO treated the impugned amount as income liable for taxation in the year under consideration. The CIT(A) has since sustained the action of the AO. 18. At the....