TMI Blog2018 (4) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of ACG Associated Capsules (P) Ltd. Vs. Commissioner of Income Tax [2012 (2) TMI 101 - SUPREME COURT OF INDIA]asheld Ninety per cent of the net interest or net rent which has been included in the profits of the assessee as computed under the head profits and gains of business or profession and not the gross rent, is to be deducted under c;.(1) of Expln. (baa) to Section 80HHC for determining the profits of the business. - thus the matter should be remanded back to the Assessing Officer to take note of the legal position and redo the assessment under the said head. - Tax Case (Appeal) No. 851 of 2008 - - - Dated:- 3-4-2018 - T. S. Sivagnanam And N. Seshasayee, JJ. For Appellant : Mr. Mr.Vikram Vijaya Raghavan Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat, in the present case, we are dealing with the law as it stood during assessment year 1993-1994. At that time Section 80HHC(3) of the IT Act constitute a code by itself. Subsequent amendments have imposed restrictions/qualifications by which the said provision has ceased to be a code by itself. In the above formula three existed four variables, namely, business profits, export turnover, total turnover and 90 per cent of the sums referred to in cl. (baa) to the said Explanation. In the computation of deduction under section 80HHc all four variables had to be taken into account. All four variables were required to be given weightage. The substitution of Section 80HHC(3) secures profits derived from the exports of eligible goods. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e attributable to exports. This was the reason for this Court to hold that indirect taxes like excise duty which are recovered by the taxpayers for an on behalf of the Government, shall not be included in the total turnover in the above formula (see: CIT Vs. Lakshmi Machine Works (supra). 22. In the present case, the processing charges were included in the gross total income from cashew business. That, even according to assessee the said charges constituted an important component of gross total income from cashew business. This is not disputed. Therefore, in terms of cl. (baa), 90 per cent of the 'independent income' had to be deducted from gross total income to arrive at business profits to which the fraction had to be applied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ACG Associated Capsules (P) Ltd. Vs. Commissioner of Income Tax reported in (2012) 247 CTR 0372. In the said case the Hon'ble Supreme Court rendered the following conclusion:- Ninety per cent of the net interest or net rent which has been included in the profits of the assessee as computed under the head profits and gains of business or profession and not the gross rent, is to be deducted under c;.(1) of Expln. (baa) to Section 80HHC for determining the profits of the business. 7. Therefore, we are of the view that the matter should be remanded back to the Assessing Officer to take note of the legal position and redo the assessment under the said head. 8. Accordingly, the Tax Case (Appeal) is partly allowed and the secon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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