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2012 (12) TMI 598 - AT - Income TaxDeduction u/s 80HHC - AO to recompute the deduction u/s 80 HHC by reducing the 90% of the net amount and not gross amount of interest & rent income – Held that:- Following the decision in case of ACG Capsules (P) Ltd. (2012 (2) TMI 101 - SUPREME COURT OF INDIA) wherein it has been held that ninety percent of not the gross rent or gross interest but only the net interest or net rent, which had been included in the profits of business of the assessee as computed under the head “PGBP”, was to be deducted under clause (1) of Explanation (baa) to section 80 HHC for determining the profits of the business. Appeal allow in favour of assessee & issue remand back to AO Adjustment in Profit for claiming deduction u/s 80HHC – Whether insurance claim received by the assessee on stock in trade is liable to be reduced to the extent of 90% received while calculating the eligible profits – Held that:- As the insurance claim received on damage of goods/raw material and has direct nexus with the business income. Therefore, insurance claim received by the assessee on stock in trade is not liable to be reduced to the extent of 90% received while calculating the eligible profits. Issue decides in favour of assessee. Adjustment of VAT refund in computing eligible profit u/s 80HHC – Whether Sales Tax remission/refund has been included as business profits it is eligible for deduction u/s 80 HHC - VAT refund received are on revenue account and routed through profit and loss account – Held that:- Following the decision in case of Alfa Laval India Ltd. (2003 (9) TMI 43 - BOMBAY HIGH COURT) The expenses on these accounts have earlier inflated the cost of purchases / production cost and, therefore, these receipts are nothing but abatement of purchase / production cost and is thus integral part of the manufacturing operations and has to be assessed under the head PGBP. Appeal decides in favour of assessee.
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