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2014 (8) TMI 559 - HC - Income TaxDeduction u/s 80HHC - Receipt of insurance claim – Receipts on sale of raw materials, tools, stores, scraps - Held that:- Following the decision in Commissioner of Income Tax Vs. Punjab Stainless Steel Industries and Others [2014 (5) TMI 238 - SUPREME COURT] - The term ‘turnover’ would show the sale effected by a business unit - It may happen that in the course of the business, in addition to the normal sales, the business unit may also sell some other things - the word “turnover” would mean only the amount of sale proceeds received in respect of the goods in which an assessee is dealing in - the sale proceeds of the scrap cannot be included in the term ‘turnover’ for the reason that the assessee’s-unit is engaged primarily in the manufacturing and selling of steel utensils and not scrap of steel - the proceeds of scrap would not be included in ‘sales’ in the Profit and Loss Account of the assessee - insurance claim, sale of raw materials, tools, stores, scraps cannot form part of turnover for the purpose of computation of deduction u/s 80HHC of the Act – Decided against Revenue. Reduction of net interest income or gross interest income – Held that:- Following the decision in Commissioner of Income Tax and Another Vs. Krone Communication Ltd. [2010 (7) TMI 631 - Karnataka High Court] - in the definition in sub-section (4C) of section 80HHC of the Income-tax Act, 1961, it is specifically mentioned that what is to be reduced in 90 per cent of any receipts by way of commission "included in such profits" - clause (baa) to the Explanation is itself based on the assumption that 10 per cent of the income would be an expense – Decided against Revenue. Deduction u/s 80HHE - Expenses in foreign currency for providing technical services outside India – Held that:- The consideration in respect of computer software received in or brought into India by the assessee in convertible foreign exchange is deducted from the profits of the business - the assessee is not liable to pay any income tax on such consideration received from export of computer software - the export turnover does not include freight, telecommunication charges or insurance attributable to the delivery of computer software outside India or expenses if any incurred in foreign exchange in providing technical service outside India. The services are technical in nature it does not fall within clause (ii) of subsection (1) of section 80HHE of the Act of providing technical services outside India in connection with the development or production of computer software - It falls under sub-clause (1) of sub-section (1) of Section 80HHE of the Act - the expenditure cannot be excluded in computing export turn over – Decided against Revenue.
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