Milton Laminates Limited v. Assistant Commissioner Of Income Tax Circle-4....Opponent(S

O/TAXAP/1833/2010 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 1833 of 2010 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE M.R. SHAH - sd/-andHONOURABLE MR.JUSTICE R.P.DHOLARIA - sd/- =============================================MILTON LAMINATES LIMITED....Appellant(s) Versus ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-4....Opponent(s) ============================================= Appearance:MRS SWATI SOPARKAR, ADVOCATE for the Appellant(s) No. 1MRS MAUNA M BHATT, ADVOCATE for the Opponent(s) No. 1 ============================================= CORAM: HONOURABLE MR.JUSTICE M.R. SHAHandHONOURABLE MR.JUSTICE R.P.DHOLARIA Date : 30/11/2013ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0.Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Income Appellate Tribunal (hereinafter referred to as the ITAT) dated 24.10.2008 passed in ITA No.2053/AHD/2004 for the AY 1997-98, the assessee has preferred the present Tax Appeal. 2.0.While admitting the present Tax Appeal following substantial question of law are framed. (i)Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that mistake in the assessment order was apparent on record and was an obvious and patent mistake and that the view taken by the Assessing Officer in the order passed under Section 154 of the Income Tax Act, 1961 was not debatable at all?Tax Appellate Tribunal was right in law in holding that mistake in the assessment order was apparent on record and was an obvious and patent mistake and that the view taken by the Assessing Officer in the order passed under Section 154 of the Income Tax Act, 1961 was not debatable at all? (ii)Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in excluding 90% of the ‘Other Income’ viz. Interest, Misc. Income and Insurance Claim from the profits of the Business while calculating the deduction u/s. 80HHC of the Act?Tax Appellate Tribunal was right in law in excluding 90% of the ‘Other Income’ viz. Interest, Misc. Income and Insurance Claim from the profits of the Business while calculating the deduction u/s. 80HHC of the Act? (iii) Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in not allowing the “Netting Off” of interest income against interest expenditure?Tax Appellate Tribunal was right in law in not allowing the “Netting Off” of interest income against interest expenditure? 3.0.Heard Shri S.N. Soparkar, learned Senior Advocate for the assessee and Shri M.R. Bhatt, learned Senior advocate for the revenue. 4.0.At the outset, it is required to be noted that so far as question nos. 2 and 3 are concerned, they are squarely covered by the decision of the Hon’ble Supreme Court in the case of ACG Associated Capsules Pvt. Ltd vs. Commissioner of Income Tax reported in (2012) 343 ITR 89(SC) in favour of assessee. Under the circumstances, the aforesaid issues / questions are now not res-integra. In the case of ACG Associated Capsules Pvt. Ltd (supra) it is held by the Hon’ble Supreme Court in the said decision that 90%of not the gross interest but only the net interest, which has been included in the profits of the business of the assessee as computed under the heads “Profits and gains of business or profession” is to be deducted under clause (1) of Explanation (baa) to Section 80HHC for determining the profits of business. Section 80HHC for determining the profits of business. 5.0.Applying the law laid down by the Hon’ble Supreme Court in the case of ACG Associated Capsules Pvt. Ltd (supra) the aforesaid question are held in favour of the assessee and order passed by the ITAT in ITA No.2053/AHD/2004 for AY 1997-98 is hereby quashed and set aside. Now, the AO to recompute the deduction under Section 80HHC of the Income Tax Act considering the law laid down by the Hon’ble Supreme Court in the case of ACG Associated Capsules Pvt. Ltd (supra) which is reproduced herein above. 6.0.In of the decision on merits with respect to question nos. 2 and 3, question no.1 become academic and therefore, the same is not dealt with. 7.0.With this, present appeal is allowed to the aforesaid extent. No costs. sd/-(M.R.SHAH, J.) Kaushik sd/-(R.P.DHOLARIA,J.)