Principal Commissioner Of Income Tax Surat I v. M/S Gunjan Exports======================================

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 789 of 2018 With R/TAX APPEAL NO. 790 of 2018 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE M.R. SHAH andHONOURABLE MR.JUSTICE A.Y. KOGJE ====================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ?allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ?copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ?question of law as to the interpretation of the Constitution of India or any order made thereunder ? ======================================PRINCIPAL COMMISSIONER OF INCOME TAX SURAT I Versus M/S GUNJAN EXPORTS====================================== Appearance: MR NIKUNT RAVAL, ADVOCATE for MRS KALPANA K RAVAL(1046) for the APPELLANT(s) No. 1for the RESPONDENT(s) No. 1 ====================================== CORAM: HONOURABLE MR.JUSTICE M.R. SHAHandHONOURABLE MR.JUSTICE A.Y. KOGJE Date : 09/07/2018 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0]As common question of law and facts arise in both these Tax Appeals, they are decided and disposed of by this common judgment and order. [2.0]Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Income Tax Appellate Tribunal, Surat Bench, Surat (hereinafter referred to as “the learned Tribunal”) dated 01/02/2018 in ITA No.2860/Ahd/2014 for the Assessment Year 2011-12 and in ITA No.3550/Ahd/2015 for the Assessment Year 2012-13 by which the learned Tribunal has dismissed the said Appeal preferred by the revenue and has confirmed the order passed by the learned CIT(A) deleting the disallowance of the interest income of Rs.70,54,454/- claimed exempt under Section 10AA of the Income Tax Act, revenue has preferred the present Tax Appeal with the following proposed question of law; “Whether on the facts and circumstances of the case and in law, the Hon’ble ITAT is justified in upholding the decision of the learned CIT(A) of deleting the disallowance of Interest income of Rs.70,54,454/- claimed exempt u/s 10AA without appreciating the fact that interest income is not derived from export of such articles or things manufactured or purchased by the assessee?” [3.0]Heard Shri Nikunt Raval, learned advocate appearing on behalf of the revenue. At the outset it is required to be noted that the issue involved in the present Tax Appeals is, whether the income of the assessee from interest from FDR is allowable under Section 10AA of the Income Tax Act or not? “Whether on the facts and circumstances of the case and in law, the Hon’ble ITAT is justified in upholding the decision of the learned CIT(A) of deleting the disallowance of Interest income of Rs.70,54,454/- claimed exempt u/s 10AA without appreciating the fact that interest income is not derived from export of such articles or things manufactured or purchased by the assessee?” [3.0]Heard Shri Nikunt Raval, learned advocate appearing on behalf of the revenue. At the outset it is required to be noted that the issue involved in the present Tax Appeals is, whether the income of the assessee from interest from FDR is allowable under Section 10AA of the Income Tax Act or not? Apart from the fact that in the case of the very assessee for the Assessment Year 2010-11 such exemption was held allowable, even independently also considering the decision of Division Bench of this Court in the case of Commissioner of Income Tax Vs. Rameshchandra S. Patel rendered in Tax Appeal No.663/2006 by which such interest income on deposit is held to be allowable for the purpose of working of deduction under Section80 IA of the Income Tax Act, applying the same analogy in the facts and circumstances of the case and more particularly the exemption claimed on the amount of interest earned on Fixed Deposit Receipt allowable under Section 10AA of the Act, the issue involved in the present Tax Appeal can be said to have been covered against the revenue. In the aforesaid decision, in the case of Rameshchandra S. Patel (Supra) while holding that the interest on deposit is to be made allowable for the purpose of working of deduction under Section 80 IA of the Income Tax Act, the Division Bench of this Court has considered and relied upon 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). [4.0]In view of the above, no substantial question of law arises in the present Tax Appeals, and therefore, the present Tax Appeals deserve to be dismissed and are accordingly dismissed. (M.R. SHAH, J.) (A.Y. KOGJE, J.)