TMI Blog2014 (12) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... ualify for deduction. Transport income – Netting of the income for the exclusion from deduction - What should be excluded is net income and net gross received - Assessee contended that it would not qualify for deduction u/s 80-I/80HH of the Act - Held that:- M/s ACG Associated Capsules Pvt. Ltd. (Formerly M/s Associated Capsules Pvt. Ltd.) & Others Versus The Commissioner of Income Tax, Central-IV, Mumbai & Others [2012 (2) TMI 101 - SUPREME COURT OF INDIA] it has been held that for the purpose section 80HHC of the Act, it is not the entire amount received by the assessee on sale of DEPB credit, but the sale value of less the face value of the DEPB that will represent profit on transfer of DEPB credit by the assessee - even other amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of calculation of deduction under Sections 80I 80HH of the IT Act and confirmed by CIT(A) while relying upon its own decisions which have not reached finality and without considering the fact that such expenses incurred from the business income only and not for earning income liable to be excluded? 2. Whether the Appellate Tribunal is right in law and on facts in restoring the issue back to AO to decide for granting benefits of the netting aspect and further directing the AO to allow expenses after verifying nexus between interest income, rent income, discount, insurance, warehousing charges tank rent for netting purpose which are held to be not derived from industrial undertaking, without considering the facts that suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d such amount as part of deduction under section 80IA/80HH of the Act. The Tribunal ultimately upheld the assessee s contention. We see no reason to take a different view. If on the basis of the discounts given by the sellers, the total profit of the assessee from the activity which was otherwise eligible for deduction 80I/80HH of the Act was to that extent increased, there is no reason why such larger sum should qualify for deduction. Coming to the question of transport income, counsel for the assessee conceded that the same would not qualify for deduction under 80-I/80HH of the Act but argued that what should be excluded is net income and net gross received thereof. This argument of the counsel for the assessee would have bearing also on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reted 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 as expense in accordance with sections 30 to 44D of the Act and is not to be included in the profits of the business of the assessee as computed under the head Profits and gains of business or profession , ninety per cent of such quantum of the receipt of rent or interest will not be deducted under clause (1) of Explanation (baa) to section 80HHC. In other words, ninety per cent of not the gross rent or gross interest but only the net interest or net rent, which has been i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (supra), also placed heavy reliance on an order dated 30.11.2013 in Tax Appeal No.213 of 2006 in the case of Rajoo Engineers Ltd. in which the Revenue s appeal raising such a question came to be dismissed relying on the decision in the case of ACG Associated Capsules Pvt. Ltd. (supra). The counsel also relied on a decision of the Delhi High Court in the case of Essel Shyam Communication Ltd. v. Commissioner of Income tax, (2012) 28 taxmann.com 243 (Delhi), in which in detailed consideration, relying on the decision of the Supreme Court in the case of ACG Associated Capsules Pvt. Ltd. (supra), exclusion was approved for deduction under section 80-IA of the Act. Having heard the learned counsel for the parties, we see no reason to entert ..... X X X X Extracts X X X X X X X X Extracts X X X X
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