Following Suggested Question Of Law v. Shah Originals[[1

IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD(Special Original Jurisdiction) PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA AND THE HON’BLE Ms. JUSTICE G. ROHINI INCOME TAX APPELLATE TRIBUNAL APPEAL NO.276 OF 2013 DATED:16.7.2013 Between: M/s. Balaji Jewellers & Exporters22-6-1069,Kali Kaman RoadGulzar HouseHyderabad … Appellant And Assistant Commissioner of Income TaxCircle 9(1), 1[st] Floor, “B” BlockI.T. Towers, A.C. GuardsHyderabad … Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA AND THE HON’BLE Ms. JUSTICE G. ROHINI I.T.T.A. NO.276 OF 2013 JUDGMENT:(per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) This appeal is preferred and sought to be admitted on the following suggested question of law. “Whether, on the facts and circumstances of the case,the Tribunal is right in sustaining the order of the AssessingOfficer, who disallowed the claim of the assessee u/s 80 HHCof the Income Tax Act, to the extent of interest received onthe Fixed Deposits? We have heard the learned counsel for the appellant and gonethrough the impugned judgment and order of the learned Tribunal. The short fact, which is relevant for consideration in this appeal,is that the assessee is an exporter of Jewellery and while doing itsbusiness, it has earned income and this has been converted intoforeign exchange. On receipt of the proceeds, the same was kept infixed deposits. The interest accrued on the fixed deposits was soughtto be treated as ‘income from business’. The learned Tribunal on fact held that as there is no directexport activity on the interest received on fixed deposits, it cannot betreated as income from business. Hence, the benefit under Section80HHC of the Income Tax Act, (for short, ‘the Act’) is not available. Itappears, the learned Tribunal has relied on a decision of Bombay High Court in Commissioner of Income Tax v. Shah Originals[[1]]. The question is whether on the aforesaid facts, Section 80HHC of the Act is applicable or not. We set out Section 80HHC(1) of the Act, hereunder: “80 HHC(1). Where an assessee, being an Indiancompany or a person (other than a company) resident inIndia, is engaged in the business of export out of India or anygoods or merchandise to which this section applies, thereshall, in accordance with and subject to the provisions of thissection, be allowed, in computing the total income of theassessee, a deduction to the extent of profits, referred to insub-section (1B), derived by the assessee from the export ofsuch goods or merchandise.” It is clear from the aforesaid Section that deduction will beallowed in respect of the profit derived by the assessee from export ofgoods or merchandise. Here, the receipt of profits from exports wasinvested in fixed deposits and the interest accrued therefrom wassought to be treated as export profits. We are unable to accept thiscontention of the assessee that the interest income earned from fixeddeposits can be said to be profit from export business. After profit isearned, the same was converted into other corpus. Section 80HHC(1)of the Act provides that on the profit derived from the corpus of exportonly, deduction can be allowed. Here the interest income derived isfrom different corpus and this income cannot be said to be profit fromthe exports, though source of investment is export profits. Nonetheless, accrual of the income is quite different from that ofbusiness. Therefore, the learned Tribunal has followed correctproposition of law. Learned counsel for the appellant - assessee contends that onidentical facts in assessee’s own case, earlier the Tribunal held infavour of the assessee and the said decision was applied by theCommissioner of Income Tax (Appeals) and hence the judgment of theCommissioner of Income Tax, should not be interfered with. Learned counsel for the appellant - assessee contends that onidentical facts in assessee’s own case, earlier the Tribunal held infavour of the assessee and the said decision was applied by theCommissioner of Income Tax (Appeals) and hence the judgment of theCommissioner of Income Tax, should not be interfered with. We are unable to accept the contention of the learned counselfor two reasons. In case of income tax assessments there cannot beany question of res judicata. Moreover, the earlier decision of the Tribunal on identical facts does not appear to be correct one. Thelearned Tribunal has power to ignore its earlier decision in preferenceto a High Court’s decision. This is exactly done in this case. Therefore, we do not find any reason to interfere with the judgment andorder of the learned Tribunal, and no question of law is involved in thismatter. Hence, the appeal is dismissed. No order as to costs. ________________________ K.J. SENGUPTA, CJ ______________________ G. ROHINI, J 16.7.2013 bnr [1]327 ITR 19