The Commissioner Of Income Tax, City – 5, Mumbai v. M/S.gitanjali Gems Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1595 OF 2010 The Commissioner of Income Tax, City – 5, Mumbai Versus M/s.Gitanjali Gems Limited ..Appellant. ..Respondent. Ms.Suchitra Kamble for the appellant.Ms.A. Vissanjee for the respondent. CORAM : J.P. Devadhar & Mrs.Mridula Bhatkar, JJ. P.C. : DATE : 28[th] February, 2011. 1.The appeal is admitted on the following questions of law : a)The substantial question of law arises in the present appeal is regarding the true scope and correct interpretation of Section 80HHC and other provisions of the Income Tax Act, 1961 and whether on the facts and in the circumstances of the case and in law the Tribunal is right in upholding the order of the CIT (A) and erred in directing the AO to allow 10% of the disallowed amount on account of the commissions / license premium and indirect expenses for earning such income.appeal is regarding the true scope and correct interpretation of Section 80HHC and other provisions of the Income Tax Act, 1961 and whether on the facts and in the circumstances of the case and in law the Tribunal is right in upholding the order of the CIT (A) and erred in directing the AO to allow 10% of the disallowed amount on account of the commissions / license premium and indirect expenses for earning such income. b)Whether on the facts and circumstances of the case and in law the Tribunal erred in upholding the order of the CIT (A) and directing the AI to allow netting off interest received on F.D.R.’s against interest payments on packing credit loan to the Bank to the extent of Rs.1,00,23,973/- without appreciating the fact that there is no provision in law permitting such adjustments. law the Tribunal erred in upholding the order of the CIT (A) and directing the AI to allow netting off interest received on F.D.R.’s against interest payments on packing credit loan to the Bank to the extent of Rs.1,00,23,973/- without appreciating the fact that there is no provision in law permitting such adjustments. 2.As regards the first question is concerned, learned counsel for the parties state that the same is covered in favour of the assessee and against the Revenue by the decision of the Apex Court in the case of CIT V/s. Hero Exports reported in 295 ITR 454 (S.C.). Accordingly, the first question is answered in favour of the assessee and against the Revenue. 3.As regards the second question is concerned, learned counsel for the parties state that the same is covered in favour of the Revenue and against the assessee by the decision of this Court in the case of CIT V/s. Asian Star Co. Limited reported in 326 ITR 56 (Bom.). Accordingly, the second question is answered in favour of the Revenue and against the assessee. 4.The appeal is disposed off in the above terms. No costs. (Mrs.Mridula Bhatkar, J.) (J.P. Devadhar, J.)