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TMI Blog2013 (2) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... n redressed, assessee raised grounds in the appeal in ITA No.2551/Mum/2011 accordingly. Since grounds on the issue of granting credit of taxes paid/ adjusted and granting of interest under section 244A does not arise out of the order under section 154, assessee raised additional grounds in ITA No.7699/Mum/2004 vide letter dated 30.10.2012. At the time of hearing, it was informed that these grievances on the additional grounds have been settled by AO by issuance of refunds/ interest and therefore the learned Counsel withdrew the additional grounds in ITA No.7699/Mum/2004 as well as the relevant grounds in ITA No.2551/Mum/2011 (Ground Nos.2, 3 & 4). That leaves us with six grounds in ITA No.7699 and Ground No.1 in ITA No.2551. 4. Assessee raised the following grounds in ITA No.7699/Mum/ 2004: "1. The Commissioner of Income Tax (Appeals)-XXI Mumbai (hereinafter referred to as the CIT (A) erred in holding the action of the Additional Commissioner of Income-tax, Range 1(3) Mumbai (AO) in disallowing an amount of Rs.10,00,000/- claimed by the appellant on the ground that it is not allowable as a deduction either under section 35(1)(ii) or under section 37(1) of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder instead of restricting to gross total income, AO restricted to profits and gains of business. The same was repeated in the order under section 154 (subject matter of appeal in ITA No.2551/Mum/2011) wherein even after disallowing the deduction under section 35DDA and arriving at the gross total income at Rs.3,98,36,297/- the restriction under section 80IB was still determined at Rs.3,20,53,797/- thereby revised the total income (income from house property) was again determined at Rs.77,82,500/-. Assessee contested the action of AO before the CIT (A)-XXI and the CIT (A) vide his order dated 12.8.2004 rejected the contentions stating that the deduction under section 80IB is to be allowed to the extent of profits and gains derived from the industrial undertaking of the Act. Accordingly he did not allow assessee's claim, nor decided the grounds when assessee again contested in appeal against the order under section 154. 7. After considering the rival contentions and legal principles on the issue, we are of the opinion that even though AO correctly stated that the deduction under section 80IB has to be restricted to the gross total income while allowing the set off, he wrongly rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was no basis or justification for AO to confine the deduction only to the extent of the profits and gains of business. In this regard our attention has been drawn to a judgment of this Court dated 4th February, 2010 in The Commissioner of Income Tax v. M/s Tridoss Laboratories Ltd (ITA 2432 of 2009). Section 80-IA allows a deduction in computing the total income of assessee and the expression 'total income' is as defined in section 2(45) viz., the total amount of income referred to in section 5 computed in the manner laid down in the Act. Following the view which we have taken in Tridoss Laboratories, we answer the question of law which has been raised in the present appeal against the Revenue and in favour of assessee. The appeal is accordingly disposed of". 9. Further in the above referred case of CIT vs. Tridoss Laboratories Ltd, 328 ITR 448, the Hon'ble Bombay High Court has considered the issue as under: "Section 80-IA of the Income-tax Act, 1961, contemplates a deduction of an amount representing hundred per cent of the profits and gains derived from the eligible business in computing the total income of the assessee. The expression "gross total income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ience Congress of ICAR towards placing of signages as a sponsor. Assessee wrote a letter to the ADG (TC), ICAR, Krishi Bhavan vide letter dated 15th December, 2000 stating that it would like to sponsor the signages and would like each Panel and Board to bear the caption prominently "SYNGENTA- Global Leaders in Agribusiness". Along with that assessee forwarded letter to facilitate matching of the colour combination and depiction of the logo. As the total sponsorship for the signages was Rs.10.00 lakhs, assessee paid the entire amount of Rs.10.00 lakhs by way of a Demand Draft drawn on 29.12.2000. The same was acknowledged by the receipt No.19. However, the receipt provided did not specify signages but mentions the amount towards organizing the 88th Session of Indian Science Congress 2001. The said receipt also has a stamp intimating that the contributions to the academy are exempted from Income Tax in terms of section 35(1)(ii) of the I.T Act upto 31.3.2000. Instead of claiming the amount under section 37(1) as part of advertisement expenditure, assessee in the computation of income claimed the deduction under section 35(1)(ii). At the relevant point of time. Section 35(1)(ii) was e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Sterling Foods Ltd vs. DCIT 237 ITR 777 and Pandian Chemicals Ltd. Vs Commissioner of Income-tax, 262 ITR 278. Before the CIT(A) assessee reiterated the same contentions and the CIT (A) while allowing the amount of Rs.3,86,282/- towards scrap sale as part of the unit income, confirmed the action of AO. 16. We have considered the rival contentions and examined the facts of the case. An amount of Rs.12,92,994/- relates to exchange difference and premium relating to import license. Following the principles laid down by the Hon'ble Supreme Court in the case of Liberty India Vs Commissioner of Income-tax, 317 ITR 218 the income from premium relating to import license cannot be considered as income derived from the undertaking. There are no details of income earned on account of exchange difference and whether the foreign exchange earned was on the unit receipts or otherwise are not placed before us. Therefore, we are unable to give any finding on the issue as necessary details are not placed on record. In view of this, the finding of the CIT (A) that the income has not arisen out of the industrial undertaking was upheld. Similarly miscellaneous interest to the extent of Rs.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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