The Commissioner Of Income Tax-7 v. M/S.varuen Continental Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYO. O. C. J. INCOME TAX APPEAL NO.508 OF 2009 The Commissioner of Income Tax-7. ...Appellant. Vs. M/s.Varuen Continental Ltd. ...Respondent. .... Mr. Vimal Gupta with Mr.Suresh Kumar for the Appellant.Ms.Arati Vissanji with Mr.S.J.Mehta for the Respondent. .....CORAM : DR.D.Y.CHANDRACHUD AND J.P.DEVADHAR, JJ. March 19, 2010. P.C. : The appeal by the Revenue has been admitted on the following questions of law: “(1)Whether the Tribunal is justified in directing to the Assessing Officer to decide fresh the above matter in the light of the decision before the Special Bench of the Tribunal in the case of Lalsons Enterprises reported in 89 ITD 25? -(2)Whether on the facts and in the circumstances of the case and in law, the Tribunal is justified in holding that the interest income is income from other sources, instead of treating the same as business income and denial of netting off interest i.e. interest received and interest paid? -(3)Whether on the facts and in the circumstances of the case and in law, the Tribunal is right in holding that the Assessee is eligible for full deduction under section 80HHC without restricting to the amounts received by way of interest were incidental to the export business as fixed deposits is valid in law?” During the course of the hearing, the attention of the Court has been drawn to the order of the ITAT dated 12[th ]September 2006, by which the proceedings have been restored to the Assessing Officer inter alia to determine as to whether the interest income is to be treated as income from business or as income from other sources and to decide the issue of netting in the light of the judgment of the Special Bench of the Tribunal in Lalsons Enterprises, 89 ITD 25. By the judgment of this Court delivered today in CIT vs. Asian Star & Co. (Income Tax Appeal No.200 of 2009), the judgment of the Special Bench in the case of Lalsons Enterprises has been overruled on the aspect of netting. In the circumstances, while the order passed by the Tribunal on 12[th] September 2006 restoring the proceedings to the Assessing Officer is affirmed, it is clarified that the Assessing Officer shall make his determination in the light of the judgment delivered by this Court in the case of Asian Star (supra). In view of this, it is not necessary for this Court to answer the questions of law raised in this appeal. The appeal is accordingly disposed of. ( Dr.D.Y.Chandrachud, J.) ( J.P.Devadhar, J.)