The Commissioner Of Income Tax 13, Mumbai v. M/S.anil & Company

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.269 OF 2010 The Commissioner of Income Tax 13, Mumbai Versus M/s.Anil & Company ..Appellant. ..Respondent. Mr.Suresh Kumar for the appellant.Mr.Sameer G. Dalal for the respondent. CORAM : J.P. Devadhar & A.A. Sayed, JJ. P.C. : DATE : 5[th] July, 2011. 1.Heard. Admit on the following substantial questions of law. (a)Whether the ITAT is right in directing the AO to treat the interest income of Rs.3,61,644/- as export business income and allow netting off interest received against interest paid for the purpose of computation of deduction u/s.80HHC ?income of Rs.3,61,644/- as export business income and allow netting off interest received against interest paid for the purpose of computation of deduction u/s.80HHC ? (b)Whether in the facts and circumstances of the case and in law, the Tribunal is right in holding that the respondent is entitled to reduce 10% of the export incentive from indirect cost while computing the deduction u/s.80HHC of the Income Tax Act ?Tribunal is right in holding that the respondent is entitled to reduce 10% of the export incentive from indirect cost while computing the deduction u/s.80HHC of the Income Tax Act ? (c)Whether in the facts and circumstances of the case and in law, the Tribunal is right in holding that the respondent is entitled to reduce 10% of the export incentive in view of the decision of this Hon'ble Court in the case reported in 202 ITR 371 - M.H. Daryani V/s. CIT, wherein it is held that the beneficial interpretation in favour of the assessee has no application, where words on statute are plain, precise and unambiguous ?Tribunal is right in holding that the respondent is entitled to reduce 10% of the export incentive in view of the decision of this Hon'ble Court in the case reported in 202 ITR 371 - M.H. Daryani V/s. CIT, wherein it is held that the beneficial interpretation in favour of the assessee has no application, where words on statute are plain, precise and unambiguous ? (d)Whether in the facts and circumstances of the case and in law, the Tribunal is justified in dismissing the appeal of the Revenue by following the judgment of the Tribunal in Surendra Engineering's case, which too has been appealed against by the Revenue in this HOn'ble Court and the said appeal too is pending before the Hon'ble Court for hearing and final disposal ?Tribunal is justified in dismissing the appeal of the Revenue by following the judgment of the Tribunal in Surendra Engineering's case, which too has been appealed against by the Revenue in this HOn'ble Court and the said appeal too is pending before the Hon'ble Court for hearing and final disposal ? (e)Whether in the facts and circumstances of the case and in law, the Tribunal is right in deleting addition of interest of Rs.19,56,133/- without any justification as the said advances to M/s.Shree Kedarling Udyog have not been justified by the respondent ?Tribunal is right in deleting addition of interest of Rs.19,56,133/- without any justification as the said advances to M/s.Shree Kedarling Udyog have not been justified by the respondent ? 2.As regards question (a) is concerned, Counsel for the parties state that the issue is already answered in favour of the Revenue and against the assessee by the decision of this Court in the case of CIT V/s. Asian Star Company Limited reported in [2010] 326 ITR 56 (Bom). Accordingly, question (a) is answered in favour of the Revenue and against the assessee. 3.As regards questions (b), (c) and (d) are concerned, Counsel for the parties state that the said issues are covered against the Revenue and in favour of the assessee by the decision of the Apex Court in the case of Hero Exports V/s. CIT reported in [2007] 295 ITR 454 (SC). Accordingly, questions (b), (c) and (d) are answered in favour of the assessee and against the Revenue. 2.As regards question (a) is concerned, Counsel for the parties state that the issue is already answered in favour of the Revenue and against the assessee by the decision of this Court in the case of CIT V/s. Asian Star Company Limited reported in [2010] 326 ITR 56 (Bom). Accordingly, question (a) is answered in favour of the Revenue and against the assessee. 3.As regards questions (b), (c) and (d) are concerned, Counsel for the parties state that the said issues are covered against the Revenue and in favour of the assessee by the decision of the Apex Court in the case of Hero Exports V/s. CIT reported in [2007] 295 ITR 454 (SC). Accordingly, questions (b), (c) and (d) are answered in favour of the assessee and against the Revenue. 4.As regards question (e) is concerned, addition of interest made by the assessing officer was deleted by the Tribunal by recording a finding of fact (see para-11 of the judgment) that the assessee has commercial relationship with M/s.Shree Kedarling Udyog, sister concern of the assessee and the assessee was availing certain facilities of the said unit namely certain machineries and, therefore, the assessee had advanced money to the sister concern for the purpose of acquiring the machineries. The Tribunal has recorded a finding of fact that the assessee was using factory premises of the sister concern at a rate lower than the market rate, which is not disproved by the assessing officer. In these circumstances, in our opinion, the decision of the Tribunal in deleting the interest is based on finding of fact. Accordingly, question (e) is answered in favour of the assessee and against the Revenue. 5.The appeal is accordingly disposed off with no order as to costs. (A.A. Sayed, J.) (J.P. Devadhar, J.)