The Commissioner Of Income Tax, City-16 v. M/S.bharat Timber & Construction Co

IN THE HIGH COURT OF JUDICATURE AT BOMBAYO. O. C. J. INCOME TAX APPEAL NO.86 OF 2005 The Commissioner of Income Tax, City-16. ...Appellant. Vs. M/s.Bharat Timber & Construction Co. ...Respondent. .... Mr. Vimal Gupta with Mr.Suresh Kumar for the Appellant.Mr.J.B. Andhyarujina,Sr. Advocate with Mr. Atul K. Jasani for the Respondent. ..... CORAM : DR.D.Y.CHANDRACHUD AND J.P.DEVADHAR, JJ. March 19, 2010. P.C. : The appeal by the Revenue was admitted on the following substantial questions of law: “(a) Question is whether, on the facts and in the circumstances of the case and in law, the Tribunal is right in allowing deduction of 90% of net interest income instead of gross income, ignoring explanation (baa) below sub section 4-B of Section 80HHC of the IT Act? (b) Question is whether on the facts and circumstances of the case and in law, the Tribunal is right in holding that net interest only should be considered to arrive at business profit subject to nexus between interest received and interest paid, when the statute clearly says, only gross should be allowed as deduction?” Counsel appearing on behalf of the Revenue and Counsel appearing on behalf of the Assessee agreed that both these questions would be covered in favour of the Revenue and against the Assessee by the judgment of this Court delivered today in CIT vs. Asian Star Co. Ltd. (Income Tax Appeal No.200 of 2009). The questions are accordingly answered in favour of the Revenue and against the assessee for the reasons stated in the judgment. The appeal is allowed. There shall be no order as to costs. ( Dr.D.Y.Chandrachud, J.) ( J.P.Devadhar, J.)