TaxTMI 
TaxTMI 
2016 (7) TMI 1301
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....ight in law and on facts in deleting the disallowance of redemption premium amounting to Rs. 2,00,000 payable to debenture-holders ?" 2.1 Tax Appeal No. 957 of 2007 also arises out of the common order dated December 29, 2006 passed by the Tribunal in I. T. A. No. 856/Ahd/1999 raising the following questions of law for our determination : "(1) Whether the Appellate Tribunal was right in law and on facts in holding that for the purpose of computing deduction under sec tions 80HHC and 80-I, deductions under section 35(1)(iv) are not to be deducted ? (2) Whether the Appellate Tribunal was right in law and on facts in holding that deduction for the use of technical know-how is allow able under section 37 and deduction for the acquisition of technical know-how is allowable under section 35AB of the Act ?" 3. Tax Appeal No. 698 of 2008 arises out of the common order dated June 29, 2007 passed by the Tribunal in I. T. A. No. 37/Ahd/2002 raising the following question of law for our determination : "Whether the Appellate Tribunal is right in law and on facts in holding that deduction under section 80HH is to be allowed on the eligible income without deductio....
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....Act, 1961 ? (E) Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by the Commissioner of Income-tax (Appeals) in holding that for computation of deduction under section 80HHC only net interest receipts should be excluded ?" 5. The assessee herein is a part of the Torrent group and is engaged in the manufacture and sale of pharmaceutical products. Its factories are situated in Ahmedabad and Mehsana Districts. The products of the assessee-company are also exported through its sister concern, viz., Torrent Exports Ltd. and Ruainde Pharmaceuticals Ltd. For the purpose of this judgment, T.A. No. 956 of 2007 is taken as the lead matter. 6. The assessee filed its return of income on November 30, 1995 for the assessment year 1995-96 declaring total income of Rs. 12,40,87,170. The said return was processed under section 143(1)(a) of the Act. Subsequently, a revised return of income was filed on March 19, 1997 declaring total income at Rs. 11,51,49,350 for the reason that there was a change in the computation of relief under sections 80HH and 80-I of the Act. Ultimately, the assessment order came to be passed on March 30, 1998. Against ....
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....ompany had issued 2,00,000 and 1,20,000 secured redeemable non-convertible debentures on March 29, 1991 and April 10, 1991 respectively. On the face value of the debentures, the assessee was required to pay Rs. 5 to the investor at the time of redemption of the debenture amount. 9.1 It is pertinent to note that in the accounting period relevant to the assessment years 1991-92 and 1992-93, the assessee had not debited the aforesaid amount in the books of account. Before the Assessing Officer, the assessee claimed that the amount payable at the time of redemption by way of premium was deductible proportionately in each of the years during the life of the debenture and accordingly, claimed deduction of Rs. 2,00,000 for the year under consideration being 1/8th of the redemption premium payable of Rs. 16 lakhs. However, the Assessing Officer and the Tribunal disallowed the claim on the ground that the assessee had not debited its account with the amount of redemption premium in the accounting years relevant to the assessment years 1991-92 and 1992-93. 9.2 In our opinion, the conclusion arrived at by both the Assessing Officer and the Tribunal is erroneous since the liability to pa....
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....n relates to deduction under section 80HH of the Act. The Assessing Officer did not allow deduction under section 80HH in view of the assessment orders for the assessment years 1991- 92 to 1996-97. Alternatively, the Assessing Officer recorded a finding that subsequently, even if the claim is held to be allowable, it should be restricted to the following : (i) Job charges would not form part of the manufacturing activities ; and (ii) Deduction under section 80HH is to be allowed after reducing deduction under section 35(2AB) and 35(1) of the Act. The Commissioner of Income-tax (Appeals) deleted the addition relating to the issue of job charges and sustained the order relating to the other issue, which was confirmed by the Tribunal. While entertaining the appeal, the Tribunal followed its earlier decision passed in the case of this very assessee in I. T. A. No. 446/Ahd/2002. We have gone through the elaborate discussion made by the Tribunal on the issue and accordingly, concur with the view taken by the Tribunal. Consequently, we answer the question in favour of the assessee and against the Revenue. Tax Appeal No. 2232 of 2009 : 13. As regards question No. (A), we find that th....