TaxTMI 
TaxTMI 
2007 (5) TMI 171
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....e, the Tribunal was correct in law in holding that depreciation under Section 32 of the Income Tax Act, 1961 was allowable on the plant and machinery in question ? 2. Whether, on the facts, and in the circumstances of the case, the Tribunal was correct in law in holding that for the purpose of computation of deduction under Section 80HHC of the Income Tax Act, 1961, Sales Tax and Central Sales Tax can not be excluded in the total turn over? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in directing computation of interest income for the purpose of deduction under Section 80HHC as per Clause (baa) of the Explanation to Section 80HHC for computing the eligible profits and gains of business?" ....
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....ntion was considered by this Court in the case of Pepsu Road Transport Corporation's case [2002] 253 ITR 303 wherein it was held that even where the machinery is kept ready for use and could not be put to use, the assessee would be entitled to depreciation as everything ages with the passage of time and even if the machinery is kept ready for use, there is a normal depreciation of value. Accordingly, the question being covered by the judgment of this Court, we answer the same against the revenue and in favour of the assessee. Question No.2 5. As far as question No.2 is concerned, learned counsel for the Revenue could not dispute that identical question came up for consideration before this Court in I.T.A. No.293 of 2005 - Commissioner of ....
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....from profits for computation of deduction u/s 80HHC. Directions may be given to consider interest income of Rs.22,24,201/- as part of profits of business and compute deduction u/s 80HHC accordingly." 9. The issue was considered by the Tribunal in paras 13 and 14 of the order passed by it, which are extracted below : "13. Regarding the second issue involved in ground No.4 of appeal of the assessee relating to interest income for the purposes of deduction u/s 80HHC, the ld. A.R. for the assessee submitted that the new clause (baa) (operative for and from the asstt. year 1992-93) of the Explanation to section 80HHC (which was also applicable to the instant case of the assessee for asstt. year 1994-95 under consideration before the Tribunal),....
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.... which were included in such profits. Orders are passed accordingly." 10. From a perusal of para 13 of the order passed by the Tribunal, which records the contentions raised by learned counsel appearing for the assessee, it is evident that he only submitted that as per clause (baa) of the Explanation to Section 80HHC of the Act, in order to compute profits and gains of business for the purpose of deduction under Section 80HHC of the Act, 90% of the receipts on account of interest are to be reduced, which are included in such profits. As the interpretation put by the assessee's counsel was strictly in spirit of the language of the Section, the departmental representative conceded on that ground. 11. No argument was raised by the assessee i....
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....fits and not otherwise. As is evident from the facts on record that the interest income earned by the assessee, which was sought to be claimed by him to be dealt with as income from business or profession, was in fact assessed as income from other sources, which order was upheld in appeal by the CIT (A). Even though, in the ground, the assessee had raised the issue for consideration of the interest income as part of the profits of business but the issue was never argued. 14. Once the conceded position on record is that the interest income earned by the assessee does not form part of income from business or profession, as computed at the time of assessment, there arises no question of deduction of 90% thereof for the purpose of calculation ....
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....differently for the purpose of calculation of deductions under Section 80HHC of the Act. The relevant para from the judgment in M/s Avery Cycle Inds. Ltd.'s case [2008] 296 ITR 393 (P &H) is extracted below:- "Once at the time of passing of the assessment order in computing the income from business or profession, the amount of receipt of interest, as mentioned above, has been shown and assessed as income from business or profession, there is no reason for reducing the same out of the income from business or profession for the purpose of calculation of deduction under Section 80HHC of the Act, as after including the same in the income from business or profession, the reduction, as envisaged under that provision, would be carried out. This i....