The Commissioner Of Income Tax v. Deccan Tobacco Enterprises

HON'BLE SRI JUSTICE C.V. NAGARJUNA REDDY & HON'BLE SRI JUSTICE T. AMARNATH GOUD I.T.T.A.No.242 of 2005 Date : 29-11-2017 ITTA No.242 of 2005 Between :

The Commissioner of Income Tax, Guntur .. Appellant And M/s.Deccan Tobacco Enterprises, Guntur .. Respondent Counsel for appellant : Smt. M. Kiranmayee Senior Standing Counsel for Income Tax Department Counsel for respondent : Sri Y. Ratnakar The Court made the following :

ORDER:

(per Hon'ble Sri Justice C.V. Nagarjuna Reddy) This appeal by Revenue raises the following questions of law:

1. Whether net interest and net rental income or total interest and rental income received by the assessee is to be taken while computing profit of business of the assessee in terms of Explanation (1)(baa) of Section 80HHC of Income Tax Act ?

2. Whether the finding of the Tribunal that only net interest and rental income if any is to be excluded in terms of Clause (baa) of Explanation to Section 80HHC of Income Tax Act, is sustainable in law ?

At the hearing, Smt. M. Kiranmayee, learned Senior Standing Counsel for the Income Tax Department, fairly submitted that the above mentioned substantial questions of law are no longer res integra in view of the Judgment of the Supreme Court in ACG Associated Capsules Pvt. Ltd. (Formerly Associated Capsules Pvt. Ltd) Vs. Commissioner of Income Tax, Central-IV, Mumbai1 wherein it was held that for the purpose of deduction under Section 80-HHC of the Income Tax Act 1961, 90% of net interest which was includible in profits of business of assessee is to be deducted for determining the profits of business.

1 (2012) 3 SCC 321

In the light of the above Judgment, the questions of law are answered against the Revenue.

The appeal is accordingly dismissed.

_______________________ Justice C.V. Nagarjuna Reddy _____________________ Justice T. Amarnath Goud Date : 29-11-2017 AM