TaxTMI 
TaxTMI 
2019 (3) TMI 570
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....nue appeal. 2. The assessee has raised the following grounds: 1. The learned Commissioner of Income-tax (Appeals) erred in deleting the disallowance of deduction u/s 80RR holding that the amount received in foreign currency and brought to India should qualify for deduction and Section 80AB says only about the nature of income that should be considered. 2. The learned Commissioner of Income-tax (Appeals) ought to have taken note of the fact that as per the provisions of Section 80AB deduction u/s 80RR can only be given at 30% of magic profession foreign income included in the gross total income. 3. The learned Commissioner of Income-tax (Appeals) failed to note that deduction under Chapter VIA can be given only ....
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.... He also submitted that in the case of the assessee, the professional income from foreign sources, which was brought into India in convertible foreign exchange for the assessment year 2003-04 was Rs. 14,98,589/- and this amount was included in the gross total income of the assessee for AY 2003-04. Therefore, in accordance with the provisions of section 80 RR, 30% of Rs. 14,98,589/- amounting to Rs. 4,49,577/- was admissible as deduction from the gross total income. He further submitted that according to the books of accounts maintained and the income and expenditure account, the total receipts including the foreign income amounts to Rs. 52,53,803/-. The expenses incurred in India in connection with Indian Operations was Rs. 46,85,207/-. Sin....
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....this chapter) shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income. " 5.1 In view of the facts of the case, the CIT(A) held that deduction can be claimed on the gross receipts and expenditure need not be reduced from the foreign exchange brought into India. Though there is a direct nexus between the travel expenses and the earning of the income of the assessee, the CIT(A) observed that the same was not relevant for the purpose of section 80 RR since the intention of the Act is clear that the amount received in foreign currency and brought to India should qualify for deduction. According to the CIT(A), Section 80 AB only says about the ....
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....ve Sale Society Ltd. Vs. Income Tax Officer (2010) 322 ITR 283) wherein the distinction was recognized and in paragraph-10, it was held as under:- "Deduction u/s 80P(2)(a)(i) of the Act is given in Chapter-VIA, which in turn deals with "deductions in respect of certain cases". Sec. 80P(1), inter-alia, states that where the gross total income of a Co-operative Society includes any income from one or more specified activities, then such income shall be deducted from the gross total income in computing the total taxable income of the assesses Society". 7.2 Further, the Apex Court found that "An income which is attributable to any of the specified activities in Sec.80P(2) of the Act, would be eligible for deduction". Going by the ab....
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....(328 ITR 629), specifically para 6 of the judgment. 8. We have heard the rival submissions and perused the record. There is no justification for treating the whole gross receipts of foreign income instead of gross total income earned from foreign sources so as to grant deduction u/s. 80 RR of the Act. The gross foreign receipts were accounted by the assessee and from that, net foreign income is to be ascertained and thereafter, deduction u/s. 80RR is to be granted at specified rate. The expenses considered by the Assessing Officer is to be deducted from the gross foreign receipts. The contention of the assessee that gross foreign receipts is to be considered so as to grant deduction u/s. 80RR of the Act is devoid of merit. In our opinion....