TaxTMI 
TaxTMI 
2014 (10) TMI 388
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....om business profit for the purpose of allowing deductions under Section 80I, 80IA and 80HH of the Act for netting purpose without considering the facts that such expenses were incurred from the business income only and not for earning incomes and hence liable to be excluded? 2. Whether the Appellate Tribunal is right in law and on facts in confirming the order of CIT (A) deleting the disallowances of Rs. 2,95,10,650/- made by AO on account of sale of poster papers, iron scrap, gunny bags etc. for the purpose of calculation of deduction under sections 80I, 80IA & 80HH of the IT Act and directing AO to allow the same, while relying upon its own decisions in the case of Nirma Ltd. & Harjivandas which have not reached finality and without considering the fact that such expenses incurred from the business income only and not for earning income liable to be excluded? 3. Whether the Appellate Tribunal is right in law and on facts in deleting the disallowances of interest from debtors of Rs. 39,26,316/- made by AO for the purpose of calculation of deduction under Sections 80I, 80IA & 80HHC of the IT Act and further directing the AO to allow the same while relying upon its own decisions i....
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.... expenses incurred from the business income only and not for earning income liable to be excluded? 7. Whether the Appellate Tribunal is right in law and on facts restoring the issue back to AO to decide for granting benefits of netting to the Assessee and further directing the AO to allow expenses after verifying nexus with income of Rs. 57,40,830/- out of sale gunny bags, bardans for the purpose of deduction under Section 80I, 80IA & 80HH of the Act for Kanpur Division of the assessee as not derived from and industrial undertaking and further directing that net income should be excluded from the business profit for the purpose of allowing deductions under section 80I, 80IA & 80HH of the Act for netting purpose without considering the facts that such expenses were incurred from the business income only and not for earning incomes and hence liable to be excluded? 8. Whether the Appellate Tribunal is right in law and on facts restoring the issue back to AO to decide for granting benefits of netting to the Assessee and further directing the AO to allow expenses after verifying nexus with various income such as Interest on Loan given to staff of Rs. 583/- and Truck hire charges of Rs....
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..... 29,962/- while working out deduction under Sections 80IA & 80HH of the IT Act on Chhatral Division while relying upon its own decisions in the case of cases of Nirma Ltd. & Harjivandas which have not reached finality and without considering the fact that such expenses incurred from the business income only and not for earning income liable to be excluded? 13. Whether the Appellate Tribunal is right in law and on facts in confirming the order of CIT(A) deleting the disallowance of Soda Ash Project Interest Expenses of Rs. 3,33,23,108/- and Rs. 12,27,78,792/- Lab Project Interest expenses? 14. Whether the Appellate Tribunal is right in law and on facts in confirming the order of CIT(A) deleting the disallowance of claim of Rs. 16,78,93,425/- u/s.35AB of the Act? 15. Whether the Appellate Tribunal is right in law and on facts in holding that interest of Rs. 4,48,36,000/- from debotrs is to be considered as part of sale price and hence no inclusion is called for in respect of such interest from business for the purpose of computing the deduction allowable to the Assessee u/s.80HHC of the Act, while following its decision in the case of Nirma Industries Ltd., which has not reached ....
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....d int eh profits of business of the assessee as computed under the head "Profits and gains of business or profession", is to be deducted under clause (1) of Explanation (baa) to section 80HHC for determining the profits of the business." In view of such decision, question No.3 raised by the Revenue gets automatically answered since the amounts referred to in the said question are to be excluded for the purpose of deduction under section 80HHC of the Act. Learned counsel for the Revenue vehemently contended that the ratio of the decision in the case of ACG Associated Capsules Pvt. Ltd (supra) cannot be applied to a situation where the exclusion from the claim of deduction relates to section 80HH or section 80-I of the Act. He strenuously urged that the language used in both the sets of provisions are different. Section 80HHC is also vitally different and that therefore the concept of netting may not be automatically applied to deduction under section 80HH and 80-I of the Act. He submitted that number of tax appeals have been admitted by this Court on this issue and this appeal may also be likewise admitted. He drew our attention to the order dated 6.5.2013 passed by this Court in ....
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.... was suggested by the assessee which may have some bearing on the controversy on hand. However, the entire focus of the order of the Court was regarding applicability of the decision of the Supreme Court in the case of Topman Exports (supra) and not on the question of netting. In any case, therein, the decision in the case of ACG Associated Capsules Pvt. Ltd was not noticed." Insofar as question Nos.2, 5, 7 and 12 are concerned, it is an undisputed position that the issues are covered by a decision of this Court in the case of Dy.C.I.T. v. Harjivandas Juthabhai Zaveri, 258 ITR 785 in which the Court upheld the decision of the Tribunal granting benefit of deduction under section 80I of the Act on various incomes, such as, job work receipt, sale of empty soda ash bardan, sale of empty barrels and plastic waste. Such questions are, therefore not required to be considered. So far as question Nos.3, 6, 9 and 15 are concerned, the same are stated to be covered by the decision of this Court in the case of Nirma Industries Ltd. v. Deputy CIT, 283 ITR 402 (Guj.) in which the Court upheld the assessee's claim for deduction under section 80I of the Act on the interest received on late paymen....