Gem India Exports v. Income Tax Officer Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 11 / 2005 Gem India Exports ----Appellant Versus Income Tax Officer Jaipur ----Respondent _____________________________________________________ For Appellant(s) : Mr. T.C. Jain For Respondent : Mr. Anuroop Singhi _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VINIT KUMAR MATHURJudgment 17/01/2017 1. By way of this appeal, the appellant has assailed thejudgment and order of the Tribunal whereby Tribunal hasdismissed the appeal filed by the aseessee and confirmed theorder of CIT(A) & AO. 2.This court while admitting the appeal on 28.1.2005 had framed following substantial questions of law:- “Whether in the facts and in the circumstances ofthe case, the Hon’ble ITAT was legally correct inupholding the order of ld. CIT(A) that interestincome received by appellant is to be assessed asincome from other source?. ”Whether in the facts and in the circumstances ofthe case, the Hon’ble ITAT was correct in notallowing the claim for netting of the interestamount received and paid and to allow deductionof excess interest of Rs.1,83,488/- as businessexpenditure?” 3.In view of the settled legal position, both the issues are squarely covered by decision of this court in M/s. Reliance TradingCorporation vs. The ITO, Ward No.2(3), Jaipur & Anr. decided on1.5.2015 reported in (2015) 376 ITR 53 wherein it has been held as under:- “41. While applying the direct and proximatenexus test, we are of the view that where the interest earned doesnot have direct and proximate nexus, with theincome from the business of export, the interestcannot be deducted as income from export underSection 80HHC (3)(a) of the Act, and has to begiven the same treatment for tax, as “incomefrom other sources” under Section 56 of the Act. 42. The question No.1 is, thus, answered infavour of the Revenue, and against theassessee.” 4.The issue is answered in favour of the revenue and againstthe assessee. 5.The appeal stands dismissed. (VINIT KUMAR MATHUR)J. (K.S. JHAVERI)J. Brijesh 20.