TMI Blog2017 (8) TMI 1410X X X X Extracts X X X X X X X X Extracts X X X X ..... nal and AO is modified to the aforesaid extent. The return filed by the assessee will be accepted and issue no. 1 will also answered in favour of the assessee. Interest receipt not constitute “business income” for the purpose of computation of deduction u/s 80HHC - Held that:- It was not necessary to refer to the explanatory Memorandum when the language of Explanation (baa) to 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 - Issue decided in favour of assessee - See ULTRATECH METALS INDIA VERSUS ACIT AND VICE-VERSA [2017 (5) TMI 1587 - RAJASTHAN HIGH COURT]. - D.B. Income Tax Appeal No. 228/2009 - - - Dated:- 28-8-2017 - Mr. K.S. Jhaveri And Mr. Inderjeet Singh JJ. For the Appellant(s) : Mr. Sanjay Jhanwar with Ms. Archana For the Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artially confirmed the order of the AO and estimated the GP rate at 31%. During the course of the appellate proceedings, the ld. AR of the assessee himself submitted the following chart, indicating the past history of the assessee:- It is clear from the above chart that there is steep decline in the GP rate of the assessee firm not in comparison to the AY 2003-04, but in comparison to all the years beginning from AY 1992-93. He has further contended that the Tribunal while considering the matter in para 1.1 observed as under:- 1.1. Confirming the trading addition of ₹ 1,59,62,022/- made by the AO by applying the G.P. rate of 26% as against 20.33% declared by the assessee. The 28.86% was considered as a basis out of which 6% is deducted and assessee was given benefit instead of 30% to 28.86% therefore, it comes to 22.86%. However, the benefit of excise is not given. Mr. Mathur at this stage has pointed to the observations made by the Tribunal in para 7 which reads as under:- 7. Considering the above submissions, especially keeping in mind that during the immediately preceding assessment year 2003- 04 the assessee had shown g.p. rate at 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt has supported the order of the Tribunal and CIT(A) and contended that the view taken by the Tribunal is required to be upheld. No interference is called for. 6. We have heard counsel for both the parties. 7. On the second issue, the issue is now squarely covered by the decision of this Court in DBITA No. 227/2009 decided on 26th May, 2017 wherein this court has observed as under:- However, in view of the decision of Supreme Court in case of ACG Associated Capsules (P) Ltd. vs. Commissioner of Income Tax, Central-IV, Mumbai reported in [2012] 343 ITR 89 (SC) wherein para 9, 10, 11 17 held as under:- 9. Explanation (baa) extracted above states that profits of the business means the profits of the business as computed under the head Profits and Gains of Business or Profession as reduced by the receipts of the nature mentioned in Clauses (1) and (2) of the Explanation (baa). Thus, profits of the business of an Assessee will have to be first computed under the head Profits and Gains of Business or Profession in accordance with provisions of Section 28 to 44D of the Act. In the computation of such profits of business, all receipts of income which are chargeabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncludes 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 allowed, in computing the total income of the Assessee, a deduction from such income by way of dividends an amount equal to a certain percentage of the income mentioned in this Section. The Constitution Bench held that the Court must construe Section 80M on its own language and arrive at its true interpretation according to the plain natural meaning of the words used by the legislature and so construed the words such income by way of dividends in Sub-section (1) of Section 80M must be referable not only 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 profits of the business as com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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