AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2009 (6) TMI 35
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...., interest, rectification charges etc., should be treated as income derived out of business for computation of deduction u/s.80HH?" 2. The various miscellaneous income falling under different items, the total sum on this head was Rs.28,16,818/-, but we are only concerned with the following items viz., (a) Interest borrowed on delayed payment of bills for sales of Vacuum Cleaners drawn on M/s. Eureka Forbes limited : Rs.6,57,344/- (b) Scrap Sales : Rs.16,04,663/- (c) Transport and Forwarding expenses recovered : Rs.1,51,156/- (d) Insurance Claim received towards imported components damaged in transit : Rs.70,629/-. (e) Amount received from Collector of Customs towards excess duty paid and charged to expenditure in respect of import fro....
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.... derived from the business of the assessee-vide : CIT V. Madras Motors Ltd./M. M. Forgings Ltd. (2002) 257 (ITR) 60 (Mad)." 4. Therefore when the business of the assessee, in the case on hand, is manufacture of Vacuum Cleaners and the purchasers of such Vacuum Cleaners paid interest on delayed payment of bills for sales, it would squarely fall within the above referred to ratio laid down and consequently the deletion was rightly rejected by the Tribunal. 5. As far as the scrap sales are concerned, on behalf of the appellant reliance was placed upon (2004) 270 ITR 448 (Pandian Chemicals Ltd., Vs. Commissioner of Income Tax). The learned standing counsel for the Income Tax Department contended that the sales of scrap was not relatable to th....
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....tting aside that part of the income allowed under Section 80HH to the tune of Rs.16,04,663/-, we direct the Tribunal to hold an enquiry afresh permitting the assessee to produce such materials in support of its stand and pass orders based on the evidence that may be placed. It is also open to the appellant to let in rebuttable evidence in support of its stand. 9. As far as the Transport and Forwarding expenses are concerned, it is quite common that such expenses incurred by way of transporting and forwarding charges are recovered from the dealers of the manufacturer. Therefore, such expenses having been incurred as part of its business activities, the manufacture and sale of Vacuum Cleaners, it can be safely held that the said expenses rec....
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....of that decision applies to the facts of this case as well." In the light of the above said categorical ruling of this Court, the deduction allowed on that head by the Tribunal cannot be allowed and to that extent the order of the Tribunal is set aside. 11. As far as the item of income viz., amount received from Collector of customs towards excess duty paid and charged to expenditure in respect of import from M/s. Electrolux is concerned, the same is covered by the decision reported in (2003) 261 ITR 737 (Commissioner of Income Tax Vs. Viswanathan and Co.). Here again, the Division Bench dealt with the income which was the duty drawback which was received by the assessee by way of cash concession drawback and import entitlement which was ....
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....uction claimed under the head receipt of excise duty paid by the assessee. Having regard to the law laid down in the above referred to decisions and following the same we hold that the deduction allowed under the said head is not permissible and to that extent the order of the Tribunal is set aside. 13. As far as the rectification charges in respect of Vacuum Cleaner units recovered from M/s. Leo Tech is concerned, we are of the view that the said charges was mostly connected with the activities of the assessee viz., the manufacturing of Vacuum Cleaners and consequently the income earned by way of rectification charges in respect of Vacuum Cleaner units recovered from its purchasers is covered by the expression "Income derived from industr....