2000-VIL-574-BOM-DT

Equivalent Citation: [2000] 245 ITR 854, 163 CTR 593, 119 TAXMANN 735

BOMBAY HIGH COURT

Date: 08.08.2000

COMMISSIONER OF INCOME-TAX

Vs

SG. JHAVERI CONSULTANCY LTD.

BENCH

Judge(s)  : S. H. KAPADIA., R. M. S. KHANDEPARKAR 

JUDGMENT

The judgment of the court was delivered by

S. H. KAPADIA J.---This appeal has been filed by the Department. It concerns the assessment year 1989-90. The assessee is a manufacturer, trader and exporter of diamonds. While calculating the deduction under section 80HHC(3), the assessee included labour charges, assistance and service charges as also interest in the business profits while applying the formula: Business profits X Export turnover/Total turnover. The Assessing Officer rejected the calculations submitted by the assessee. However, the Tribunal has accepted the claim of the assessee for inclusion of the above items in the business profits in the above formula. Hence, the Department has come in appeal. In the case of CIT v. K. K. Doshi and Co. [2000] 245 ITR 849 (Bom), in Income-tax Appeal No. 77 of 2000, this court has taken the view that receipts like interest, commission, etc., cannot be included in the business profits as the said items do not have any linkage with the export activities. This court has held that a combined reading of clauses (b) and (ba) of the Explanation to section 80HHC shows that the business profits in the above formula did not include receipts by way of brokerage, commission, interest, rent or any other receipt of a similar nature as they do not have any nexus with the sale proceeds from export activities. In view of the said judgment, this appeal is allowed with no order as to costs.

C. C. expedited.

 

 

 

DISCLAIMER: Though all efforts have been made to reproduce the order accurately and correctly however the access, usage and circulation is subject to the condition that VATinfoline Multimedia is not responsible/liable for any loss or damage caused to anyone due to any mistake/error/omissions.