2014 (12) TMI 176

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... 323 ITR 397 (SC). Reliance was also placed on the judgment of Hon'ble Bombay High Court rendered in the case of Director of Income-tax (International Taxation) Vs Oman International Bank [2008] 313 ITR 128 (Bom). 4. We have considered the rival submissions. We find that this issue was decided by CIT(A) as per Para 26 of his order, which is reproduced below for the sake of ready reference:- "26. I have considered the facts and circumstances of the case, the reasoning of the AO and the submissions of the appellant through Ld. AR, relevant part of which has been reproduced above. The claim of Bad debts defined in the Section 36(1)(vii) of the Income Tax Act, 1961 provides that - "No such deduction shall be allowed unless such debt or part thereof has been taken into account in computing the income of the assessee of the previous year in which the amount of such debt or part thereof is written off or of an earlier previous year, or represents money lent in the ordinary course of business or money lending which is carried on by the assessee". The assessee vide written submissions dated 20.02.2006 and 07.11.2006 has already enclosed the export sales and also the RBI approvals ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....income from other sources as against profits and gain from business without appreciating the fact that this is a debatable issue among the courts. 4. That the Ld. Commissioner of Income Tax (A) has erred in law and on facts in deleting the addition of Rs. 6,48,.557/- under Miscellaneous receipts without verifying the facts and circumstances of the case." 7. Learned D.R. of the Revenue supported the assessment order. Regarding ground No. 3 i.e. regarding deleting interest income of Rs. 41,55,388/-, he placed reliance on the judgment of Hon'ble Delhi High Court rendered in the case of CIT vs. SHRI RAM HONDA POWER EQUIP & ORS as reported in [2007] 207 CTR 689. He also placed reliance on the judgment of Delhi High Court in the case of CIT vs. Jyoti Apparels [2008] 166 Taxman 343 (Del). 8. As against this, Learned A.R. of the assessee supported the order of learned CIT(A). He also placed reliance on a decision of Special Bench of the Tribunal in the case of Assistant Commissioner of Income-tax, Circle 16(1), Mumbai v. Prakash L. Shah [2008] 115 ITD 167. He also placed reliance on a judgment of Hon'ble Bombay High Court rendered in the case of CIT vs. Rachna Udhyog [2010....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ision in the light of above discussion after providing adequate opportunity of being heard to both the sides. First issue being Ground No. 2 is allowed for statistical purposes. 12. Regarding the second issue being interest income of Rs. 41,55,388/-, we find that the judgments of Hon'ble Delhi High Court rendered in the case of Jyoti Apparels (supra) and in the case of SHRI RAM HONDA POWER EQUIP & ORS (supra) are squarely applicable. In the latest case, it was held by Hon'ble Delhi High Court that interest earned on FDR even for the purpose of availing credit facilities from bank does not have immediate nexus with the export business and therefore, it has to be necessarily treated as income from other sources and not business income. Hence, respectfully following this judgment of Hon'ble Delhi High Court, we hold that interest income in the present case cannot be treated as business profit for the purpose of computing deduction allowable to the assessee u/s 80HHC. Accordingly, ground No. 3 is allowed. 13. Now we deal with ground No. 4 of the Revenue i.e. regarding misc. receipt. We find that although it was the claim of the assessee that misc. receipt is on accoun....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....lars No.564 and 571 dated 5.7.1990 and 1.8.1990 respectively, as issued by the CBDT to clarify and remove the rigors of law and the Authorities below were obliged under the law to compute relief admissible to the appellant under section 80IB, on the basis of the said circulars. 4. BECAUSE the appellant's claim for relief under section 80IB, as per the computation given by it, cannot be said to be defeated even by the decision of Hon'ble apex court in the case of Liberty India Vs. CIT in (2009) 317 ITR 218, as has been referred to and relied upon by the "CIT(Appeals)". 5. BECAUSE in any case and without prejudice to the contentions raised in the foregoing grounds No. 1, 2, 3 & 4 above, for the purposes of exclusion from eligible profit, only such amount of "duty draw back" should have been considered as arrived at after adjusting the expenses incurred in earning such "duty draw back". 6. BECAUSE alternate claim for relief under section 80HHC was liable to be considered and allowed with reference to the income earned, without any adjustment on account of "duty draw back" as received by the "appellant" and not even by the net amount of "duty draw back" (as arrived at ....