TMI Blog2013 (11) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... t.Ltd. vs. Commissioner of Income Tax [2012 (2) TMI 101 - SUPREME COURT OF INDIA] and CIT vs. K.Ravindranathan Nair (2007) [2007 (11) TMI 10 - Supreme Court of India], wherein it was held that the processing charges formed part of the gross total income as an independent income like Rent, Commission, brokerage, etc. Consequently, 90% of the said sum has to be reduced from the gross total income, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conversion charges' has to be included under clause (baa) of explanation to Section 80 HHC of the Act in the adjusted business profits for computation of deduction is valid?" 2. The assessee herein is a manufacturer of yarn out of purchase of cotton and cotton waste on its own and it had also done conversion, on job work basis by converting the raw materials into yarn. The Assessing Officer excl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment order. Aggrieved by the same, the assessee once again preferred the appeal before the Commissioner of Income Tax (Appeals), who relying on the earlier decision of the Income Tax Appellate Tribunal in the assessee's own case for earlier years decided the issue in favour of the assessee. Aggrieved by the same, the Revenue preferred appeal before the Income Tax Appellate Tribunal, which confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to arrive at the business profits. 6. Even from the reading of the order of the Income Tax Appellate Tribunal, it is clear that the issue raised herein is only as to whether 'net conversion charges' has to be considered under clause (baa) of Explanation to Section 80HHC of the Act in the adjusted business profits for computation of deduction and the question is not on the gross conversion charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. 9. Thus going by the Apex Court's judgment reported in 295 ITR 228 (SC) and (2012) 343 ITR 89 (SC) [cited supra], we hold that the net conversion charges would also form part of the gross total income. Therefore, 90% of the said sum has to be reduced in the total turnover of the assessee for arriving at the business profits. 10. In the result, the appeal preferred by the Revenue fail ..... X X X X Extracts X X X X X X X X Extracts X X X X
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