TMI Blog2004 (11) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... . The duty payable thereon could be adjusted against such credit. In case, assessee was not interested in importing goods, it could transfer such credit to other exporter/importer engaged in the same line of business against cash receipts. The assessee, instead of importing goods, transferred the credits to other parties. The sum of Rs. 1,90,23,953 was received by the assessee against transfer of such credits and the same was shown as business receipts under section 28(iiia) in the books of account for the year under consideration. Accordingly, the assessee claimed deduction under section 80HHC in respect of business profits inclusive of the above sum. The Assessing Officer, after considering the reply of assessee and various decisions, hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the CIT(A) were (i) that DEPB receipts were in the nature of revenue receipts assessable as business receipts under section 28(iv) of the Act; (ii) that it was not derived from business of export though it was attributable to such business. Further, it could not be considered as export receipts since such receipt was not in the nature of convertible foreign exchange as part of sale proceeds of exported goods. Hence, it would be considered as any other receipt within the scope of Explanation (baa) to section 80HHC; and (iii) that it could not be considered as export incentives for the purpose of the proviso to section 80HHC(3). Hence, decision of ITAT in the case of Lalsons, 89 ITD 25(SB) would not be applicable. Therefore, in case of lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such items. On the other hand, the learned DR has strongly relied upon the order of CIT(A) by submitting that receipts under section 28(iv) would fall within the scope of the word "any other receipts of a similar nature" as these words are of widest amplitude and would, therefore, include any receipt other than the sale proceeds of exported goods in convertible foreign exchange. Regarding interest income, it was pleaded that it has been assessed as income from other sources and assessee has not been able to controvert such finding. Consequently, such interest was rightly excluded from the profits of business. In reply, it was stated by the learned counsel for assessee that it is only the net interest that should be assessed and not the gros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 80HHC. This led to great litigation between the assessee and the department. In order to resolve the controversy, the legislature defined "Profits of business" in a different manner by introducing clause (baa) in the Explanation to section 80HHC(4A) and simultaneously amended provisions of sub-section (3) of section 80HHC by Finance (No. 2) Act of 1991. So, the legislature in its own wisdom excluded certain receipts from the ambit of profits of business as computed under the head "Profits and Gains of business or profession". This background is to be kept in mind while defining the scope of clause (baa). 7. Let us now examine the scope of the above provision. The bare perusal of the same shows that the legislature has excluded 90 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd category. Therefore, considering the rule of ejusdem generis, the words "or any other receipt of a similar nature" would take its colour from the words "brokerage, commission, interest, rent, charges", etc. The rule of ejusdem generis is well known principle for construction of a statute. According to "Principle of Statutory Interpretations" by Shri G.P. Singh, it has been defined as- "When particular words pertaining to a class, category or genus are followed by general words, the general words are construed as limited to things of the same kind as those specified." The above principle has been recognized by the apex court in various cases mentioned by the author at page 383 of Eighth Edition. Reference can be made to one of those c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modified to that extent and Assessing Officer is directed to recompute the deduction under section 80HHC in accordance with our finding. 11. Regarding the award money, the learned counsel for assessee has not seriously challenged the order of the CIT(A). Hence, no interference is called for in the order of CIT(A) on that count. 12. Regarding interest income also, no serious arguments were made by learned counsel for assessee. Such income has been assessed as income from other sources and no argument was made to challenge such finding. The only argument was that deduction on account of interest on borrowed funds be allowed under section 57(iii). This contention of assessee cannot be accepted as there is no material available before us i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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