TaxTMI 
TaxTMI 
2015 (2) TMI 1325
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.... deduction u/s 10B; Particulars Amount Brokerage on Ocean Freight 84,880 Sale of Sample 21,956 Processing Charges 57,970 Other 80 Total 1,64,886 4. After hearing both the parties we find that during assessment proceedings the Assessing Officer noticed that assessee has certain misc. receipts details of which are as under:- Brokerage on shipping freight Rs. 84, 880 Sale of samples Rs. 91,956 Processing charges Rs. 57,970 Others Rs. 80 Total Rs. 164,6886 The assessee has included these items in the profit for the purpose of computing deduction u/s 10B. In response to the show cause notice that why these items should be considered as profit, the assessee relied on the decision of Tribunal in earlier years. However, the Assessing Officer noticed that after decision of Tribunal, the Hon'ble Supreme Court in the case of CIT v K. Ravindranathan Nair (2007) 295 1 TR 228 (SC) observed that profit incentives and item like rent and commission were not part of the profits, therefore, he excluded these items from the profit for the purpose of computing deduction u/s 810B 5. On appeal, the action of the Assessing Offi....
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....P. Ltd (supra) following the earlier decision in the case of CIT vs Impel Forge and Allied Industries Ltd 325 ITR 27 (P&H) held that the assessee is entitled to deduction u/s 801B from the job work done for others. Therefore, following this ratio, even this issue is covered in favour of the assessee. 11 In view of the above discussion, we are of the opinion that assessee is entitled to deduction u/s 10B on all the items referred to in appeal. Therefore, we set aside the order of Ld. CIT (A) and direct the Assessing Officer allow deduction u/s 10B 12. In the result appeal is partly allowed. ITA No. 849/Chd/2008: 13 In this appeal the assessee has raised the following grounds:- 1. The Ld. CIT (A) has erred in law and on facts while treating interest received from others amounting to R s. 186319/- as "Income from other Sources" instead of "Income from Business or Profession ", detailed as under: Particulars Amount (in R s.) Interest on Income Tax Refund Rs. 74582 Bank Interest R s. 34454 Other Interest Rs. 77283 Total Rs. 186319 2. That the Ld. CIT (A) has erred in law and on the facts while reducing eligible profits of under....
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....d. The Assessing Officer did not find force in these submissions and referred to section 10B(6)(iii) and 801A(9) and observed that double deduction was not permissible, therefore, the same cannot be allowed. 21. This issue was taken up before Ld. CIT (A) by way of ground No. 5 but it seems that the same has not been adjudicated by first appellate authority. 22. Before us it was mainly submitted that in terms of sub section (4) of section 10B, the deduction was to be allowed on proportionate basis i.e. in proportion of the export sales to the total sales. This clearly means that if some domestic sales are also made then this deduction is restricted. Therefore, naturally on such domestic sales the assessee would have right to claim deduction u/s 801B. 23. On the other hand L d. DR strongly supported the order of Assessing Officer. 24. We find force in the submissions of Ld. Counsel for the assessee because sub section (4) mandates proportionate deduction on profits depending upon the quantity of export. However, the Assessing Officer has not discussed this issue in detail how much export was carried out by the assessee and whether any domestic sales were also there. Furth....
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.... the preceding years for similar activities. The interest which was received on delayed payments on account of sale to customers of manufactured goods could clearly be termed to be income derived from the industrial undertaking and was distinct from income on account of interest which had been received from fixed deposits." 32. From the above it become clear that interest received from delayed payments on account of sale to customers of manufactured goods is directly related to the industrial undertaking and was to be considered as part of the profit for computing deduction. The Ld. CIT (A) has decided this issue in favour of the assessee by following this decision. Therefore, we find nothing wrong with the order of Ld. CIT (A) and we confirm the same. 33. Ground No. 2 : After hearing both the parties we find that during assessment proceedings the Assessing Officer noticed that assessee has received some amounts on account of exchange rate fluctuations which have been included in the profits for computing deduction. He held that such profits cannot be said to have been derived from industrial undertaking and, therefore, not eligible for deduction u/s 10B. 34. On appeal, Ld....
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....onsequent upon which an exchange fluctuation arose. Consequently, the entire receipt of R s. 26.62 lakhs on account of exchange fluctuation was treated as income under the head of income from other sources. The assessee also received interest income of R s. 31.29 lakhs from the EEFC account. This receipt was also treated as income under the head of income from other sources. The order of the Assessing Officer was affirmed by the Commissioner (Appeals). 38. On appeal the Hon'ble High Court held as under:- "Held, allowing the appeal, that the proceeds of the EEFC account were to be utilized for bonafide payments by the account holder subject to the limits and the condition prescribed. An assessee who was an exporter was not under an obligation of law to maintain the export proceeds in the EEFC account but this was a facility which was made available by the Reserve Bank. The transaction of export was complete in all respect upon the repatriation of the proceeds. It lies within the discretion of the exporter as to whether the export proceeds should be received in a rupee equivalent in entirety or whether a portion should be maintained in convertible foreign exchange in ....