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TMI Blog2012 (8) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... electrical fittings as against of its treatment on par with plant and machinery as they are electrical fittings only." 3. Brief facts of the case are that the Assessing Officer observed that certain assets of electrical fittings were claimed under the head plant and machinery. The Assessing Officer reclassified those items and allowed lesser depreciation. The list of the items had been certified in the report u/s. 32(1)(iia) to make the assessee eligible for claiming additional depreciation also. The assessee filed a list of the electrical items reclassified by the Assessing Officer at Rs. 22,13,071. Before the CIT(A) the assessee submitted that the installed capacity of 1,00,000 MT was increased by a further 10,000 MT. An amount of Rs. 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and to that extent the same will be eligible for deduction u/s. 80-IA of the Act. As regards sales tax refund, by following the decision of this Tribunal in Godavari Drugs Ltd. (89 ITD 326), the CIT(A) directed the Assessing Officer not to exclude sales tax refund for the purpose of computation of deduction u/s. 80IA. With regard to processing charges by following the decision of this Tribunal in Biological E. Ltd. for A.Y. 2003-04 in ITA No. 911/Hyd/2006, wherein it was held that the job work receipts had a direct nexus with the manufacturing activity of the assessee, he directed the Assessing Officer to recalculate the deduction u/s. 80-IA of the Act accordingly. 9. We have heard the learned DR and also perused the material on record. Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 that definition. Interest paid and claimed as deduction in computation of profits and gains for business, cannot be set off interest received and computed under income from 'other sources'. What has been said about interest is clearly applicable to the other items of income included in the computation under the head profits and gains of business or profession. Accordingly, we allow the ground taken by the department in its appeal." 10. Respectfully following the order of the co-ordinate Bench of this Tribunal, the order of the CIT(A) is hereby reversed. Accordingly, these grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that Assessing Officer reduced the deduction u/s. 80HHC. The contention of the assessee is that all sections under the Chapter VIA operate independently and deduction under one particular section is to be calculated without making any deduction under Chapter VIA. The CIT(A) placed reliance on the order of the Special 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under: "The learned CIT(A) erred in directing the AO not to include excise duty and sales tax in the total turnover for the purpose of deduction u/s. 80HHC." 16. The CIT(A) by following his order in assessee's own case for A.Y. 2002-03, directed the Assessing Officer not to include excise duty and sales tax in the total turnover for the purpose of deduction u/s. 80HHC. Accordingly the CIT(A) allowed this ground of the assessee. Aggrieved the Revenue is in appeal before this Tribunal. 17. We find this is covered in favour of the assessee by the judgement of the Hon'ble Supreme Court in the case of CIT vs. Lakshmi Machine Works reported in 290 ITR 667 wherein the Apex Court held as follows: "18. ... Therefore, just as commission receive ..... X X X X Extracts X X X X X X X X Extracts X X X X
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