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TMI Blog2012 (10) TMI 891X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2. Short facts apropos are that the A.O. while calculating deduction under Section 80HHC of the Act, had excluded 90% of the job receipts from the eligible profits relying on Explanation (baa). Though assessee argued that such amounts could not be considered for exclusion, this was not accepted by the Assessing Officer. 3. In its appeal before ld. CIT(Appeals), argument of the assessee was that 90% job receipts that were required to be reduced had to be considered with respect to the net amounts. As per the assessee, expenses incurred for the purpose of earning such receipts should be deducted and only 90% of the balance ought to be excluded for the purpose of calculation of deduction under Section 80HHC of the Act. However, the ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es incurred by the assessee for earning such income, could be considered for exclusion while applying Explanation (baa) to Section 80HHC of the Act. 6. Learned D.R. fairly admitted that the matter required a re-look by the A.O. in view of the decision of Hon'ble Apex Court in the case of M/s ACG Associated Capsules Pvt. Ltd. (supra). 7. We have perused the orders and heard the rival submissions. Insofar as reopening done for assessment year 2003-04 is concerned, learned A.R. fairly admitted that this was rightly done by the A.O. relying on the decision of Hon'ble Apex Court in the case of Kelvinator India Ltd. (supra). Insofar as exclusion of job work receipts is concerned, we find that Hon'ble Apex Court in the case of K. Ravindranathan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t we have taken of Explanation (baa) to Section 80HHC is also the view of the Delhi High Court in Commissioner of Income-Tax v. Shri Ram Honda Power Equip (supra) and the Tribunal in the present case has followed the judgment of the Delhi High Court. On appeal being filed by the Revenue against the order of the Tribunal, the High Court has set aside the order of the Tribunal and directed the Assessing Officer to dispose of the issue in accordance with the judgment of the Bombay High Court in Commissioner of Income-Tax v. Asian Star Co. Ltd. (supra). We must, thus, examine whether reasons given by the High Court in its judgment in Commissioner of Income-Tax v. Asian Star Co. Ltd. (supra) were correct in law. 14. On a perusal of the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the gross total income from cashew business and hence in terms of Explanation (baa), ninety per cent of the gross total income arising from processing charges had to be deducted under Explanation (baa) to arrive at the profits of the business. In this case, this Court held that the processing charges received by the assessee were part of the business turnover and accordingly the income arising therefrom should have been included in the profits and gains of business of the assessee and ninety per cent of this income also would have to be deducted under Explanation (baa) under Section 80HHC of the Act. In this case, this Court was not deciding the issue whether ninety per cent deduction is to be made from the gross or net income of any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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