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2014 (10) TMI 741 - GUJARAT HIGH COURTDeduction u/s. 80HH and 80I - Interest income on deposit with IDBI u/s 32AB – Interest income from getting bank guarantees of the Forest departments for the purchases of Tendu leaves – Whether the interest income cannot be said to be income derived from industrial undertaking and the same be excluded for the purpose of calculating deduction u/s. 80HH and 80I of the Act - Held that:- Following the decision in M/s Liberty India Versus Commissioner of Income Tax [2009 (8) TMI 63 - SUPREME COURT] - duty drawback, DEPB benefits, rebates etc. cannot be credited against the cost of manufacture of goods debited in the Profit & Loss account for purposes of Sections 80-IA/80-IB as such remissions (credits) would constitute independent source of income beyond the first degree nexus between profits and the industrial undertaking - Duty drawback receipt/DEPB benefits do not form part of the net profits of eligible industrial undertaking for the purposes of Sections 80I/80-IA/80-IB – Decided against assessee. Calculation of deduction u/s 80HH and 80I – Interest income without reducing interest expenses excluded or not - Held that:- Following the decision in Commissioner of Income Tax -Ahmedabad-III Versus Nirma Ltd. [2014 (10) TMI 388 - GUJARAT HIGH COURT] - Ninety per cent of not the gross rent or gross interest, but the net thereof shall have be excluded - the amounts are to be excluded for the purpose of deduction u/s 80HHC of the Act - when the profit is being excluded from the claim of deduction, not the gross profit but the net thereof, that is the gross profit minus the expenditure incurred for earning such profit should be excluded – the benefit of deduction u/s 80I of the Act on various incomes, such as, job work receipt, sale of empty soda ash bardan, sale of empty barrels and plastic waste is to be granted – Decided in favour of assessee.
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