GST Helpdesk Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
What's New Case Laws Highlights Articles News Forum Short Notes Statutory TMI SMS More ...
Extracts
Home List
← Previous Next →

2016 (8) TMI 158 - GUJARAT HIGH COURT

2016 (8) TMI 158 - GUJARAT HIGH COURT - TMI - Deduction under section 80HHC - Whether the Income Tax Appellate Tribunal is right in law and on facts in holding that 90% of profit of sale of licence computed in the proportion of export turnover to the total turnover should be added to the profit of business for computation of deduction u/s 80HHC? - Held that:- We have also gone through the judgment cited by learned advocate for the respondent. In the case of ACG Associated Capsules Pvt. Ltd. v. C .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

L NO. 506 of 2009 With TAX APPEAL NO. 391 of 2010 With TAX APPEAL NO. 392 of 2010 - Dated:- 29-7-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE APPELLANT : MRS MAUNA M BHATT, ADVOCATE FOR THE OPPONENT : SERVED BY AFFIX.-(R) ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. By way of these appeals, the appellant has challenged order dated 28.12.2007 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench B , Ahmedabad in ITA No.3614/Ahd/2002 and another order dated 26.10.2007 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the case, the Appellate Tribunal was right in law in holding that the commission and insurance are business profits and accordingly not to be reduced while calculating deduction u/s 80HHC of the Act? 3. At the time of hearing of present appeals, learned advocate for the appellant submitted that the Tribunal has committed an error while dismissing the appeal preferred by the department and the impugned order is required to be set aside. 4. Ms.Parikh, learned advocate for the respondent submitted .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d Capsules Pvt. Ltd. v. Commissioner of Income-Tax reported in [2012] 343 ITR 89 (SC), it is observed that, ninety percent of not the gross rent or gross interest but only the net interest or rent, which had been included in the profits of business of the assessee as computed under the head Profits and gains of business or profession , was to be deducted under clause (1) of Explanation (baa) to Section 80HHC for determining the profits of the business. In the said decision, it is observed as und .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r any other receipt which are included in the profits of the business as computed under the head Profits and Gains of Business or Profession . Therefore, if any quantum of the receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature is allowed as expenses under Sections 30 to 44D of the Act and is not included in the profits of business as computed under the head Profits and Gains of Business or Profession , ninety per cent of such quantum of rec .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the judgment of the Constitution Bench of this Court in Distributors (Baroda) P. Ltd. v. Union of India and Others (supra). Section 80M of the Act provided for deduction in respect of certain intercorporate dividends and it provided in sub-section (1) of Section 80M that where the gross total income of an assessee being a company includes any income by way of dividends received by it from a domestic company, there shall, in accordance with and subject to the provisions of this Section, be allowe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ly to the category of income included in the gross total income but also to the quantum of the income so included. Similarly, Explanation (baa) has to be construed on its own language and as per the plain natural meaning of the words used in Explanation (baa), the words receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature included in such profits will not only refer to the nature of receipts but also the quantum of receipts included in the pr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f we now apply Explanation (baa) as interpreted by us in this judgment to the facts of the case before us, if the rent or interest is a receipt chargeable as profits and gains of business and chargeable to tax under Section 28 of the Act, and if any quantum of the rent or interest of the assessee is allowable as an expense in accordance with Sections 30 to 44D of the Act and is not to be included in the profits of the business of the assessee as computed under the head Profits and Gains of Busin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ing the profits of the business. 13. The view that 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and brokerage do not possess any nexus with export turnover and, therefore, the inclusion of such items in the profits of the business would result in a distortion of the figure of export profits. The High Court has relied on a decision of this Court in Commissioner of Income-Tax v. K. Ravindranathan Nair [(2007) 295 ITR 228 (SC)] in which the issue raised before this Court was entirely different from the issue raised in this case. In that case, the assessee owned a factory in which he processe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ation of profits and gains of business of the assessee and as a result ninety per cent of the profits of the assessee arising out of the receipt of processing charges was not deducted under clauses (1) of the Explanation (baa) to Section 80HHC. This Court held that the processing charges was included 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s to be made from the gross or net income of any of the receipts mentioned in clause (1) of the Explanation (baa). 15. The Bombay High Court has also relied on the Memorandum explaining the clauses of the Finance Bill, 1991 contained in the circular dated 19.12.1991 of the Central Board of Direct Taxes to come to the conclusion that the Parliament intended to exclude items which were unrelated to the export turnover from the computation of deduction and while excluding such items which are unrel .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o Section 80HHC was clear that only ninety per cent of receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature included in such profits computed under the head profits and gains of business of an assessee could be deducted under clause (1) of Explanation (baa) and not ninety per cent of the quantum of any of the aforesaid receipts which are allowed as expenses and therefore not included in the profits of business of the assessee. 16. In the resu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ld that ninety per cent of the gross interest has to be excluded from the profits of the business of the assessee under Explanation (baa) to Section 80HHC of the Act and deducted ninety per cent of the gross interest of ₹ 50,26,284/- from the profits of the business of the assessee. The assessee preferred an appeal contending that only ninety per cent of the net interest should have been deducted from the profits of the business of the assessee under Explanation (baa) to Section 80HHC, but .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Latest Notifications:

    Dated      Category

20-7-2017 Cus (NT)

18-7-2017 IT

18-7-2017 CE (NT)

18-7-2017 CE

18-7-2017 GST CESS Rate

15-7-2017 Kerala SGST

14-7-2017 Andhra Pradesh SGST

14-7-2017 Cus (NT)

14-7-2017 Cus

13-7-2017 Co. Law

13-7-2017 Co. Law

13-7-2017 ADD

13-7-2017 ADD

12-7-2017 Jammu & Kashmir SGST

12-7-2017 Gujarat SGST

12-7-2017 Gujarat SGST

12-7-2017 CGST Rate

12-7-2017 UTGST Rate

12-7-2017 UTGST Rate

12-7-2017 IGST Rate

More Notifications


Latest Circulars:

19-7-2017 Income Tax

18-7-2017 Customs

17-7-2017 Customs

14-7-2017 Income Tax

13-7-2017 Central Excise

13-7-2017 Customs

13-7-2017 Central Excise

13-7-2017 Customs

7-7-2017 Income Tax

7-7-2017 Goods and Services Tax

More Circulars



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version