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TMI Blog2018 (9) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... een admitted on 11.8.2008 on the following substantial question of law : Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the job work charges should be excluded from the profits of the business for the purpose of computation of deduction under Section 80HHC of the Income Tax Act, 1961 ? 4. The Tribunal, by the impugned order, followed the decision of the Hon'ble Supreme Court in the of CIT Vs. K.Ravindranathan Nair [reported in (2007) 295 ITR 228] wherein it has been held that Clause (baa) of the Explanation states that 90% of the incentive profits or receipts by way of brokerage, commission, interest, rent charges or any other receipt of like nature included in business profits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture mentioned in Clause (1), which is actually included in the profits of the assessee, is to be deducted from the profits of the assessee for determining 'profits of the business of the assessee' under Explanation (baa) to Section 80HHC of the said Act. 6. The decision in ACG Associated Capsules (P) Ltd., was followed by the Division Bench of this Court, to which, one of us (TSSJ) was a party, in the case of CIT Vs. Kadri Mills Ltd. [reported in (2014) 360 ITR 0595] and after taking note of the decisions in K.Ravindranathan Nair and ACG Associated Capsules (P) Ltd., the Division Bench of this Court dismissed the appeal filed by the Revenue was dismissed, the operative portions of which read thus : 5. Learned counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the total turnover in the said formula to arrive at the business profits for computing deduction under Clause (baa) of Explanation to Section 80HHC of 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 fails and the same is dismissed. 7. In the light of the decision referred to above, which was rendered after the impugned order was passed by the Tribunal, the matter has to be necessarily remitte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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