2013 (11) TMI 428

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....kesh JUDGMENT (The Judgment of the Court was made by Chitra Venkataraman, J.) The Revenue is on appeal as against the order of Income Tax Appellate Tribunal, Chennai 'A' Bench dated 09.09.2008 in ITA.No.744/Mds/2007 relating to the assessment year 1997-98 raising the following question of law: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law ....

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....d the matter back to the Assessing Officer with a direction to examine the aspect as to whether the conversion charges could be construed to be part of the operational income of the assessee, in the light of the decision of the Bombay High Court reported in 260 ITR 371 [Commissioner of Income Tax vs. Bangalore Clothing Company]. On remand, the Assessing Officer made a fresh assessment and confirme....

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....ted that the contention of the assessee practically rests on the decision of the Apex Court reported in (2007) 295 ITR 228 (SC) [Commissioner of Income Tax vs. K.Ravindranathan Nair], wherein it is held that the processing charges received by the assessee exporter, being an independent income, has to be given full application of the formula for reducing the total receipts by way of 90% from the gr....

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....ge, etc. Consequently, the Apex Court held that the 90% of the said sum has to be reduced from the gross total income, to arrive at the business profits. 8. Since the processing charges was an important component of the business profits, it has to be included in the total turnover in the said formula to arrive at the business profits for computing deduction under clause (baa) of Explanation to Se....