2019 (12) TMI 328

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....al was right in upholding the exercise of jurisdiction by the Assessing Officer under Section 147 of the Act ? ii) Whether on the facts and in law, the Tribunal was right in upholding the action of the Assessing officer of deducting 90% of the income from truck hire charges, barge hire charges, ore processing receipts, trans-shipper loader charges, machinery hire charges and launch hire charges while computing the "profits of the business" in accordance with Clause (baa) of the Explanation below Section 80HHC ? iii) Whether on the facts and in law, the Tribunal was right in not following its earlier Order dated February 26, 2010 in the Appellant's own case for the earlier Assessment year i.e. 1997-1998, where the Tribu....

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....tial question of law at (ii), (iv) and (v) can be taken up for consideration together. He points out that the issues which arise from these questions are no longer res integra. He refers to the decision of the Hon'ble Apex Court in ACG Associated Capsules (P) Ltd. vs. Commissioner of Income Tax, 2012 18 Taxman.com 137(SC). He submits that in this case, the Hon'ble Apex Court has held that the deductions had to be made not on gross rent or gross basis but only on net rent, net interest or net basis. He submits that cognisance was taken on this position in CIT vs. Sesa Goa Ltd. Tax Appeal No.81 of 2006 decided on 07.05.2015. On this basis, Mr. Diniz submits that though this Court may have to hold that deduction as referred to in subst....

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.... Supreme Court, has clearly held that deductions of the nature as are referred to in the substantial question of law at (ii) above, are permissible, such deductions are required to be made not on the gross receipts but on the net receipts. This is clear from the observations in paragraph 12 which read as follows : "12. If we now apply Explanation (baa) as interpreted by us in this judgment to the facts of the case before us, if the rent or interest is a receipt chargeable as profits and gains of business and chargeable to tax under Section 28 of the Act, and if any quantum of the rent or interest of the assessee is allowable as an expense in accordance with Sections 30 to 44D of the Act and is not to be included in the profits of t....