TMI Blog2012 (8) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... he other items of income included in the computation under the head profits and gains of business or profession. Same has been held for current year Reduction of 80IA relief from the eligible business profits for computing relief u/s. 80HHC - Held that:- Deduction u/s. 80HHC is to be allowed on profit and gain as reduced by the deduction claimed and allowed u/s. 80IB/80IA. See ACIT vs. Hindustan Mint and Agro Products (P) Ltd.(2009 (6) TMI 124 - ITAT DELHI-C). Matter set aside to the file of the CIT(A) to adjudicate this issue in the light aforesaid decision Deduction u/s 80HHC - exclusion of excise duty and sales tax from total turnover for the purpose of deduction - Held that:- Since excise duty and sales tax did not involve any such turnover, such taxes had to be excluded. See CIT vs. Lakshmi Machine Works (2007 (4) TMI 202 - SUPREME COURT) - Decided in favour of the assessee - I.T.A. No. 154/Hyd/2009 - - - Dated:- 28-6-2012 - SHRI CHANDRA POOJARI, AND SHRI SAKTIJIT DEY, JJ. Appellant by: Shri K.J. Rao Respondent by: Shri P. Murali Krishna O R D E R PER CHANDRA POOJARI, AM: This appeal of the Revenue is directed against the order of the CIT(A)-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dingly the ground raised by the Revenue is dismissed. 6. Ground Nos. 3 to 6 are as under: 3. The CIT(A) ought to have upheld the exclusion of total interest income, credit balances written back, sales tax refund and processing charges, etc., from eligible business profits as they are not directly derived from the industrial undertaking. 4. The CIT(A) direction to exclude only net interest income from eligible business is not reasonable as the gross interest earning is attributable to industrial unit. The CIT(A) observation that other incomes such as sales tax refund, processing charges, etc., are attributable to business unit is not justifiable. 5. The CIT(A) ought to have upheld the exclusion of 90% of other incomes of interest, exchange gain, etc., as per clause (baa) of 80HHC of IT Act. 6. The CIT(A) direction to exclude net interest income as against of gross interest under (baa) of 80HHC and to treat foreign exchange gain as similar to sale proceeds is not reasonable for computation of deduction u/s. 80HHC. 7. The Assessing Officer observed that while computing deduction u/s. 80IA the assessee had not reduced a part of the interest income, credit balances written ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of deduction u/s. 80HHC and the amount of interest paid by the assessee could not be deducted from gross interest. A plain reading of clause (baa) Explanation to sec. 80HHC of the Act makes this aspect quite clear. Actually, interest income is to be assessed as Income from other sources . However, in the event, when it is assessed as income from business, 90% of such gross income to be excluded. The clause (bass) under the Explanation to section 80HHC defines profits of business as computed under the head Profit and gains of business or profession . The deductions to be made are from the amount of profits so computed and not from the amount computed under any other head of income of that assessee. The reference to such profits in sub clause (1) of clause (baa) can only be to the profits of the business computed under the head Profits and gains of business or profession . Additions of prefix the to profits in clause (baa) while referring to the profits and gains of business or profession makes it clear that it is only the amount already included in the computation which are now to be reduced to the extent of 90%, if these items on which are included in sub clause (1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecial Bench in the case of ACIT vs. Rohini Garments and Others (111 TTJ 274) Special Bench (Chennai) (108 ITD 49) wherein it was held that : The deduction cannot be allowed ignoring the restrictive clause contained in section 80IA(9). The restrictive clause in section 80IA(9) makes it abundantly clear that whether deduction under any other section of Chapter VI-A(C) is claimed, the computation will be subject to the restrictions laid down in section 80IA(9). It precludes pro tanto all the deductions of such profit and gains claimed under Chapter VI-A(C). Section 80HHC is part of Chapter VI-A(C). It is not a self contained provision. There is absolutely no ambiguity on this aspect. We are therefore of the opinion that relief u/s. 80IA should be deducted from the profits and gains of the business before computing relied u/s. 80HHC of the Act. However, in our opinion there is one more order of the Special Bench in the case of ACIT vs. Hindustan Mint and Agro Products (P) Ltd., 25 DTR 73 Special Bench (Delhi) and this order of the Tribunal was not available to either parties at the time of adjudicating this appeal by the CIT(A) and in the interest of justice, we set aside the ent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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