2024 (8) TMI 975

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....y Singh, Sr. Standing Counsel. SANJEEV PRAKASH SHARMA, J.(ORAL) 1. The following question of law was framed at the time of admission of ITA-597-2008, on 28.11.2008:- "Whether the appellant - assessee is entitled to claim exemption as per Section 10B of the Act in respect of manufacturing unit name M/s Arihant Spinning Mills which was got converted into 100% EOU from a DTA unit during the assessment year 1995-96 and also in view of Circular No. 1 of 2005, dated 06.01.2005? 2. Learned senior counsel submits that during the pendency of the appeal, the aforesaid question of law has been rendered infructuous and the same is, therefore, not pressed. However, she submits that vide CM-4632-CII-2009, she had prayed for amended ques....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Gujarat High Court relied upon its earlier Division Bench judgment in case of Nirma Industries Ltd. vs. Dy. CIT [2006] 283 ITR 402 (Gujarat). The same was again followed by the Gujarat High Court in CIT vs. Nirma Ltd. [2014] 367 ITR 12. The view taken by the Gujarat High Court has been upheld by the Hon'ble Supreme Court. 6. Learned counsel for the revenue does not controvert with regard to the said judgments having been passed by the Gujarat High Court but submits that this Court should independently examine the matter. 7. We have considered the submissions. 8. For the purpose of adjudication of the present appeal, it would be apposite to quote the concerned paras of Atul Ltd. (supra) as under:- "4. Heard the learned Cou....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....vision has been made by the assessee with respect to the interest charged /earned for a period of 90 days from the purchaser on delayed payment of sale consideration, and therefore, the same cannot be stated to have any nexus with the business is concerned, it is required to be noted that merely because some special provision is made by the assessee, it cannot be said that interest earned on late payment of sale consideration would be the amount derived from business. 4.1. Now so far the reliance placed upon the decision of the Hon'ble Supreme Court in the case Ravindranathan Nair (supra) is concerned on considering the facts of the case before of the Hon'ble Supreme Court, we are of the opinion that the said decision would not....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e same has been passed on its own facts and would not be applicable to the facts of the case on hand. 12. As regards amended question of law 'B' is concerned, we find that the same has already been examined by this Court in ITA-408-2007, decided on 02.09.2016, titled as M/s Mahavir Spinning Mills Ltd. vs. Commissioner of Income Tax, Ludhiana and another. 13. The Coordinate Bench considered the following questions of law which are akin to the amended questions of law as framed in the present case:- i. Whether on a true and correct interpretation of Section 80HHC of the Income Tax Act, 1961, the Tribunal has erred in law in holding that the export turnover of the unit whose profits are exempt under section 10B of the Income Tax....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ntention that for the purpose of computation of profits derived from the export turnover, it was the total export turnover which had to be considered for arriving at the amount of export turnover as well as the amount of total turnover. It was contended on behalf of the revenue that once the income from the unit in EPZ was included from scope and ambit of total income, it could not be reintroduced for the sake of making a deduction under section 80HHC as profits and gains of the business. Delhi High Court held as under:- "10. Having considered the arguments advanced by the counsel for the parties, while we agree with what the learned counsel for the revenue states that the provisions of Section 10 (A) (4) (iii) would not be applica....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... opinion that the export turnover from the unit in the EPZ is not to be excluded while computing the deduction under Section 80HHC. The deduction that is to be computed is without reference to the total income. Once the deduction is computed in terms of the formula prescribed in Section 80HHC (3), the amount so arrived at is to be deducted from the total income. However, while computing the deduction, reference to total income' is not called for.? 13. We are in respectful agreement with the judgment. For the point under consideration the provisions of Section 10A and 10B are similar. The judgment though under section 10A applies to the present case under section 10B. 15. Similar view was taken by the Madras High Court in Com....