High Court Of Madras
CIT vs. Adyar Gate Hotel Ltd.
Section 80HHD
Asst. Year 1993-94
P.D. Dinakaran & P.P.S. Janarthana Raja, JJ.
Tax Case (Appeal) No. 2257 of 2006
2nd November, 2006
Counsel Appeared :
J. Narayanasamy, for the Appellant : Habibullah Basha for C. Manishankar, for the Respondent
JUDGMENT
P.D. DINAKARAN, J. :
The above tax case appeal is directed against the order of the Tribunal dt. 13th Jan., 2006 made in ITA Nos. 1519/Mad/2002 for the asst. yr. 1993-94 and the following substantial question of law has been raised for consideration :
“Whether in the facts and circumstances of the case, the Tribunal was right in holding that expenditure tax, luxury tax and sales-tax should not be included in the total business receipts of the assessee for the purpose of computation of deduction under s. 80HHD ?” The AO, for the asst. yr. 1993-94, included expenditure tax, luxury tax and sales-tax in the business receipts for the purpose of computation of deduction under s. 80HHD of the IT Act, 1961 (hereinafter referred to as ‘the Act’), on the ground that since the liability to pay these taxes arose on account of the assessee carrying on the business, the receipts would form part of the total turnover. On appeal by the assessee, the CIT(A) confirmed the order of AO. On further appeal by the assessee, the Tribunal, held that expenditure tax, luxury tax and sales-tax should not be included in the total business receipts of the assessee. Hence, the present appeal by the Revenue raising the question of law referred to above. It is brought to our notice by the learned senior counsel appearing for the assessee, which is not disputed by the counsel appearing for the Revenue, that the issue raised in the question is covered against the Revenue in the unreported decision of this Court in the assessee’s own case in Tax Case No. 233 of 2006, dt. 23rd Feb., 2006, wherein this Court, after considering the decision of this Court in CIT vs. Wheels India Ltd. (2005) 197 CTR (Mad) 284 : (2005) 275 ITR 319 (Mad) and the decision of Bombay High Court in CIT vs. Sudarshan Chemicals Industries Ltd. (2000) 163 CTR (Bom) 596 : (2000) 245 ITR 769 (Bom), held the issue in favour of the assessee.
It is seen that in the above two cases, viz., CIT vs. Wheels India Ltd. (supra) and CIT vs. Sudarshan Chemicals Industries Ltd. (supra), the Courts considered s. 80HHC of the Act relating to deduction in respect of profits retained for export business and held that sales-tax and excise duty are not to be included in the total turnover while computing deduction under s. 80HHC of the Act. This Court in the assessee’s own case in Tax Case No. 233 of 2006 dt. 23rd Feb., 2006, while considering s. 80HHD of the Act relating to deduction in respect of earnings in convertible foreign exchange, applied the above ratio and held that expenditure tax, luxury tax and sales-tax should not be included in the total business receipts for the purpose of computation of deduction under s. 80HHD of the Act. Following the ratio laid down by this Court in the assessee’s own case in Tax Case No. 233 of 2006 dt. 23rd Feb., 2006, we hold that the Tribunal was right in holding that expenditure tax, luxury tax and salestax should not be included in the total business receipts of the assessee for the purpose of computation of deduction under s. 80HHD of the Act. Accordingly, we do not find any question of law, much less a substantial question of law that arises out of the order of the Tribunal and the tax case appeal stands dismissed. No costs.
[Citation : 294 ITR 547]