2015 (11) TMI 70

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....d Standing Counsel for the respondent. 3. The appellant is said to be a Partnership Firm having a modern Processing and Cold Storage Plant. The appellant filed a return of income for the assessment year 1996-97 on 30.10.1996 disclosing its total income as NIL. They claimed deduction under section 80 HHC as well as under section 80 IA. 4. The case was processed under section 143(1)(a) and a notice was issued on 15.9.1997. 5. Thereafter, an order of assessment was passed on 31.3.1999, holding that the appellant was not entitled to deduction under section 80 HHC in respect of (i) processing charges of Rs. 18,97,879/-, (ii) processing and cold storage service charges of Rs. 10,60,000/- and (iii) storage charges of Rs. 2,74,839/-. 6. The ass....

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....hat portion of the order relating to section 80 IA. However, the assessee has come up on appeal as against the order of remand passed by the Tribunal, on the short ground that it has wrongly held that Explanation (baa) to be applicable. The following questions of law were framed at the time of admission:- "1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the Explanation (baa) to Section 80 HHC of the Income Tax Act, 1961 would apply to the processing hall and cold storage service charges and storage charges received by the appellant for use of its entire infrastructure facilities? 2. Whether on the facts and in the circumstances of the case, the Income Tax Appellat....

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....tion 80 HHC would apply. That leaves us with the only remaining question as to whether processing charges of Rs. 18,97,879/- would call for deduction under section 80 HHC or whether the Explanation (baa) would apply even to the processing charges or not. 10. The learned counsel for the appellant seeks to make a distinction between processing charges and the processing and cold storage service charges. According to the learned counsel for the appellant, the processing charges are the income derived by the appellant by undertaking job work for other exporters. In contrast, the processing and cold storage service charges are those earned by him by letting out to third parties, the entire infrastructure including the storage hall, the plant an....