TMI Blog2004 (8) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... e business income under provisions of Explanation ( baa ) of section 80HHC. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding the interest income as income from business by relying on the decision of Mumbai High Court decision in the case of Punit Commercial Ltd. 245 ITR 551 (Bom.) and Bombay ITAT decision in the case of Pink Star 27 ITD 137 . 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding the above without appreciating the latest decision of Bombay High Court in the case of CIT v. Ravi Ratna Exports (P.) Ltd. 246 ITR 443 (Bom.) and other decisions of Hon ble ITAT, Madras in the case of M/s. Krisler Diesel Engines Pvt. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money in order to secure "quota rights". These deposits are compulsory in this type of business. The assessee does not have any option whatsoever. The interest income does not reach the assessee at all. Since the assessee has made investment in fixed deposits and earnest money deposits with the help of overdraft facilities the amount in respect of fixed deposits and earnest money deposits are transferred from overdraft bank account and interest on overdraft account is claimed as deduction from business income. So, interest received on fixed deposits and earnest money deposits, is netted off against interest charged by the bank. The net interest is shown as deduction from business income, in the financial statement. If there is any delay in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned DR submits that the Hon ble Bombay High Court has taken into consideration and distinguished Mahindra Mill s case ( supra ). Therefore, the order of the Assessing Officer was correct when he worked out the depreciation and allowed the same in spite of no claim made by the assessee. In Indian Rayon Corpn. Ltd. s case ( supra ), the Hon ble Bombay High Court has held, inter alia , that income tax is a charge on an assessee in respect of his total income computed in accordance with the provisions of the Act. However, in cases where the total taxable income comprises profits derived from a newly established undertaking under section 80HH of the Income-tax Act, then such profits have got to be computed separately as laid down by the Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case where an assessee claim special deduction under Chapter VI-A. Also while computing the total claim of the income, the assessee made set off of depreciation against its gross total income. In such case, depreciation was like any other ordinary expenditure. However, such depreciation cannot be equated with the special type of deduction under Chapter VI-A. 7. From the above discussion, it is evident that in Indian Rayon Corpn. Ltd. s case ( supra ), their Lordships of the Supreme Court have distinguished Mahindra Mill s case ( supra ) only on facts. In the relm of sections 32 and 34 of the Act, Mahindra Mill s case ( supra ) is very much good law. 8. In Mahindra Mill s case ( supra ), it has been categorically held : "T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly for the benefit of the assessee. If he does not wish to avail of that benefit for some reason, the benefit cannot be forced upon him. It is for the assessee to see if the claim of depreciation is to his advantage. Income under the head "Profit and gains of business or profession" is chargeable to income-tax under section 28 and income under section 29 is to be computed in accordance with the provisions contained in sections 30 to 43A. The argument that since section 32 provides for depreciation it has to be allowed in computing the income of the assessee, cannot in all circumstances be accepted in view of the bar contained in section 34. If section 34 is not satisfied and the particulars are not furnished by the assessee his claim for de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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