TMI Blog2019 (3) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... ate. The expenses considered by the AO is to be deducted from the gross foreign receipts. The contention of the assessee that gross foreign receipts is to be considered so as to grant deduction u/s. 80RR of the Act is devoid of merit. The foreign income represented net income received and deposited into Bank account and it is not gross foreign receipts. Reliance is placed on the judgment of the Supreme Court in the case of CIT vs. P.K. Jhaveri [1989 (11) TMI 1 - SUPREME COURT] wherein it was held that deduction u/s. 80K of the Act was allowable to the assessee only on the amount after deduction of the interest paid on moneys borrowed specifically for investment in the shares and not on the gross amount received. We place reliance on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals) ought to have taken note of the fact that as per the provisions of Section 80AB deduction u/s 80RR can only be given at 30% of magic profession foreign income included in the gross total income. 3. The learned Commissioner of Income-tax (Appeals) failed to note that deduction under Chapter VIA can be given only in respect of the amount of income of that nature which is included under Gross Total Income. 2.1 The Ld. AR also raised the ground that the Revenue appeal is not maintainable in view of low tax effect. 3. The facts of the case are that the assessee had been carrying on his profession and earning income from India and abroad. The assessment was completed u/s 143(3) disallowing the claim for certain expenditure raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s admissible as deduction from the gross total income. He further submitted that according to the books of accounts maintained and the income and expenditure account, the total receipts including the foreign income amounts to ₹ 52,53,803/-. The expenses incurred in India in connection with Indian Operations was ₹ 46,85,207/-. Since the entire foreign earnings were net of expenses, the assessee was able to bring the entire income from abroad in convertible foreign exchange. 5. The CIT(A) considered the order of the Hon'ble ITAT, Mumbai Bench in the case of CIT Vs, Anup Jalota relied upon by the assessee. The CIT(A) observed that the issues involved in assessee ss case and the decision by the ITAT, Mumbai Bench are identica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... travel expenses and the earning of the income of the assessee, the CIT(A) observed that the same was not relevant for the purpose of section 80 RR since the intention of the Act is clear that the amount received in foreign currency and brought to India should qualify for deduction. According to the CIT(A), Section 80 AB only says about the nature of income that should be considered and not the quantum of income that is to be borne in mind to claim deduction under Chapter VIA of the Act.. 6. Against this, the Revenue is in appeal before us. The Ld. DR submitted that in view of the direction of the Jurisdictional High Court in assessee s own case in ITA No.70/2014 dated 31/10/2017, the appeal of the assessee is to be decided on merit and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or more specified activities, then such income shall be deducted from the gross total income in computing the total taxable income of the assesses Society . 7.2 Further, the Apex Court found that An income which is attributable to any of the specified activities in Sec.80P(2) of the Act, would be eligible for deduction . Going by the above interpretation, the Ld. AR submitted that deduction should be from the gross total income for the income brought into India at the first stage, in order to arrive at the total income and further deductions are to be made from the total income. 7.3 The same interpretation was given to the above provision for deduction in respect of certain income by the Apex Court in CIT Anr. vs. Yokogawa India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be ascertained and thereafter, deduction u/s. 80RR is to be granted at specified rate. The expenses considered by the Assessing Officer is to be deducted from the gross foreign receipts. The contention of the assessee that gross foreign receipts is to be considered so as to grant deduction u/s. 80RR of the Act is devoid of merit. In our opinion, the foreign income represented net income received and deposited into Bank account and it is not gross foreign receipts. Reliance is placed on the judgment of the Supreme Court in the case of CIT vs. P.K. Jhaveri (181 ITR 79) (SC) wherein it was held that deduction u/s. 80K of the Act was allowable to the assessee only on the amount after deduction of the interest paid on moneys borrowed specifical ..... X X X X Extracts X X X X X X X X Extracts X X X X
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