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M/s RBT Exports Versus The Assistant Commissioner of Income Tax

2015 (11) TMI 70 - MADRAS HIGH COURT

Computation of qualifying income by applying the Explanation (baa) under section 80 HHC - whether Processing Charges, Processing hall and cold storage service charges and storage charges are not in the nature of turnover of the business? - Held that:- Insofar as two out of the three items of claims for deduction under section 80 HHC are concerned, Explanation (baa) would apply. Insofar as the processing charges alone are concerned, the matter requires re-examination by the assessing officer.

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aw are answered against the assessee. - T. C. (A) No. 915 of 2007 - Dated:- 11-8-2015 - V. Ramasubramanian And T. Mathivanan, JJ. For the Petitioner : Mr. M P Senthilkumar For the Respondent : Mr. M Swaminathan JUDGMENT (Judgment of the Court was delivered by V. Ramasubramanian, J. ) This Tax Case Appeal arises out of an order of remand passed by the Income Tax Appellate Tribunal, directing the assessing officer to compute the qualifying income by applying the Explanation (baa) under section 80 .....

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nd a notice was issued on 15.9.1997. 5. Thereafter, an order of assessment was passed on 31.3.1999, holding that the appellant was not entitled to deduction under section 80 HHC in respect of (i) processing charges of ₹ 18,97,879/-, (ii) processing and cold storage service charges of ₹ 10,60,000/- and (iii) storage charges of ₹ 2,74,839/-. 6. The assessing officer applied Explanation (baa) to section 80 HHC to arrive at the said conclusion. 7. The appellant filed an appeal befo .....

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ficer could not be given effect to. Therefore, the assessing officer held the order of rectification to have become infructuous. As against the said conclusion, the appellant filed a fresh appeal. But, the Commissioner of Income Tax (Appeals) dismissed the said appeal by order dated 11.10.1999. 8. In the meantime, the appellant filed a further appeal before the Tribunal as against the first order dated 10.5.1999 passed by the Commissioner of Income tax dismissing his appeal. The Tribunal, by ord .....

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d by the Tribunal, on the short ground that it has wrongly held that Explanation (baa) to be applicable. The following questions of law were framed at the time of admission:- "1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the Explanation (baa) to Section 80 HHC of the Income Tax Act, 1961 would apply to the processing hall and cold storage service charges and storage charges received by the appellant for use of its .....

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621 dated 19.12.1991 and hence holding that Explanation (baa) to Section 80 HHC was applicable and 90% of the income arising from Processing Charges, charges for processing hall and cold storage plant and storage charges should be excluded while computing deduction under Section 80 HHC?" 9. Unfortunately, for the assessee, the question as to whether processing and cold storage service charges and storage charges would come within the Explanation (baa) to section 80 HHC or not, is already co .....

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e supreme Court. Hence, to that extent, we cannot find fault with the order of the Tribunal holding that the Explanation (baa) to section 80 HHC would apply. That leaves us with the only remaining question as to whether processing charges of ₹ 18,97,879/- would call for deduction under section 80 HHC or whether the Explanation (baa) would apply even to the processing charges or not. 10. The learned counsel for the appellant seeks to make a distinction between processing charges and the pro .....

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