High Court Of Bombay
CIT vs. Dresser Rand India (P) Ltd.
Section 80HHC, 80-IB
Asst. Year 2003-04
Dr. D.Y. Chandrachud & J.P. Devadhar, JJ.
IT Appeal No. 4168 of 2009
8th April, 2010
Counsel appeared :
F.V. Irani with A.K. Jasani, for the Appellant : Suresh Kumar, for the Respondent
JUDGMENT
by the court :
The appeal by the Revenue under s. 260A of the IT Act, 1961 arises out of an order of the Tribunal dt. 23rd April, 2009 in relation to the asst. yr. 2003-04. The appeal is admitted on the following two questions :
“(i) Whether on the facts and in the circumstances of the case, the Hon’ble Tribunal is correct in holding that receipts from ‘interest on deposits’ and ‘miscellaneous income (reversal of learned charges)’ are derived from the business of industrial undertaking and therefore are eligible for claim of deduction under s. 80-IB, despite there being no direct nexus between source of these receipts and business of industrial undertaking ?
(ii) Whether on the facts and in the circumstances of the case, the Hon’ble Tribunal is right in holding that 90 per cent, of receipts from freight and insurance, packing charges, sales-tax set off and gross service income are not to be excluded from the profits of the business in terms of Expln. (baa) to s. 80HHC of the Act, despite there being no direct nexus between the source of these receipts and the export business of the assessee ?”
Counsel appearing on behalf of the Revenue and counsel appearing on behalf of the assessee are agreed in stating before the Court that question (ii) as formulated shall stand covered against the assessee and in favour of the Revenue in terms of the decision of the Court rendered today in CIT vs. Dresser Rand India (P) Ltd. (2010) 232 CTR (Bom) 52 : (2010) 39 DTR (Bom) 169 : (2010) 323 ITR 429 (Bom) (IT Appeal No. 2186 of 2009). Since both the appeals relate to the same issue and involve similar questions, they have been heard together. In view of the statement made before the Court, question (ii) shall stand answered in favour of the Revenue and against the assessee. Insofar as question (i) is concerned, the learned counsel state that the issue as to whether interest on deposits would be allowable towards the deduction under s. 80-IB is covered by the decision of the Supreme Court in Liberty India vs. CIT (2009) 225 CTR (SC) 233 : (2009) 28 DTR (SC) 73 : (2009) 317 ITR 218 (SC). In the circumstances, the question of law as regards interest on deposits is answered against the assessee and in favour of the Revenue in terms of the judgment of the Supreme Court in Liberty India (supra).
As regards the question of miscellaneous income (reversal of learned charges), counsel appearing on behalf of the assessee and the Revenue are agreed that the issue may be remanded back to the Tribunal for fresh consideration, in the light of the judgment of the Supreme Court in Liberty India (supra). Ordered accordingly.
The appeal is accordingly allowed in the aforesaid terms. There shall be no order as to costs.
[Citation : 330 ITR 453]
