Itxa/3481/2010 Of The Commissioner Of Income Tax -18 Mumbai v. Vidyut Corporation

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL (L) NO.2863 OF 2009 The Commissioner of Income Tax ..Appellant. V/s. M/s. Vidyut Corporation ..Respondent. Mr. A.S. Shivsharan for appellant. Mr. K.B.Bhujle with P.V. Bhujle for respondent. CORAM : DR. D.Y.CHANDRACHUD AND J.P.DEVADHAR, JJ. DATED : 21ST APRIL, 2010 P.C. :- 1.In the appeal which has been filed by the Revenue under Section 260A of the Income Tax Act, 1961, the following two questions of law have been formulated:- 1)Whether on the facts and circumstances of the case and in law, the Tribunal was right in upholding the order CIT(A) directing the AO not to reduce the receipt of interest income by way of bill discounting at Rs.80,31,351/- and not to allow deduction u/s.80IB on the said interest income without appreciating that said income is not "derived from" the manufacturing ?law, the Tribunal was right in upholding the order CIT(A) directing the AO not to reduce the receipt of interest income by way of bill discounting at Rs.80,31,351/- and not to allow deduction u/s.80IB on the said interest income without appreciating that said income is not "derived from" the manufacturing ? 2)Whether on the facts and circumstances of the case and in law, the Tribunal was right in upholding of the CIT(A) that the A.O. cannot deduct the income under the head "interest" of Rs.13,87,368/- from the business income for the purpose of computation of deduction u/s.80IB ?law, the Tribunal was right in upholding of the CIT(A) that the A.O. cannot deduct the income under the head "interest" of Rs.13,87,368/- from the business income for the purpose of computation of deduction u/s.80IB ? 2.The appeal arises out of the order passed by the Tribunal on 15 June, 2009 for assessment years 2000-01 and 2002-03. By a judgment delivered today in a companion appeal namely, Income Tax Appeal (L) No.2865 of 2009, the order that was passed by the Tribunal for assessment year 2000-01 has been dealt with. The questions of law raised in the present appeal are similar to those raised in the companion appeal. In the circumstances, the present appeal is admitted on the aforesaid two questions of law. In terms of the decision of this Court in Income Tax Appeal (L) No.2865 of 2009, the first question of law shall stand answered against the the Revenue and in favour of the assessee, while the second question of law shall stand answered in favour of the Revenue and against the assessee. For the reasons indicated in the aforesaid judgment of the Court in that appeal, the appeal is allowed to the aforesaid extent. There shall be no order as to costs. (J.P.DEVADHAR, J.) (DR. D.Y.CHANDRACHUD, J.)