Calcutta High Court
Cit. Kolkata-Iii vs M/S Itc Limited on 5 October, 2015
Author: Girish Chandra Gupta
Bench: Girish Chandra Gupta, Shib Sadhan Sadhu
ORDER SHEET
GA 2968/2014
ITAT 147/2014
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction [Income Tax]
ORIGINAL SIDE
CIT. KOLKATA-III, KOLKATA
Versus
M/S ITC LIMITED
BEFORE:
The Hon'ble JUSTICE GIRISH CHANDRA GUPTA
The Hon'ble JUSTICE SHIB SADHAN SADHU
Date : 5th October, 2015.
Mr.Ranjan Sinha, Adv.,
for the appellant.
Mr.J.P. Khaitan, Sr. Adv.,
Mr.Nilanjana Banerjee(Pal), Adv.,
respondent.
The Court : The appeal is directed against a judgment and order dated 25th April, 2014 passed by the Income Tax Appellate Tribunal. The revenue has come up in appeal. The following questions were pressed by Mr.Sinha :
"(iv) Whether on the facts and circumstances of the case and without prejudice to the above grounds the learned Tribunal was justified in law in allowing that the expenses and the depreciation in respect of assets of Mantralayan Undertaking and Transit flat was to be reduced while computing the receipts of licence fees and transit flats for the 2 purposes of clause (baa) of Explanation of Section 80HHC and 80HHE of the Income Tax Act, 1961;
(v) Whether on the facts and circumstances of the case and without prejudice to the above grounds the learned Tribunal has failed to appreciate that the word employed in clause (baa) of Explanation of Section 80HHC and 80HHE of the Income Tax Act, 1961 is receipt and not income and therefore, the gross amount was deductible from the profits of the business for the purpose of computing deduction under Section 80HHC and 80HHE of the Act".
Both Mr.Sinha and Mr.Khaitan were ad idem as to the fact that the aforesaid questions pressed by Mr.Sinha are covered by a judgment of the Supreme Court in the case of ACG Associated Capsules Private Limited Vs. CIT, reported in [2012] 343 ITR 89 (SC) Their Lordships clarified that "ninety per cent of not the gross rent or gross interest but only the net interest or net rent, which has been included in the profits of business of the assessee as computed under the head "Profits and gain of business or profession", is to be deducted under clause (1) of Explanation (baa) to section 80HHC for determining the profits of the business" and it is not in dispute that the explanation (baa) appearing in Section 80HHC is also similarly worded in explanation (d) to Section 80HHE.
3
In that view of the matter, the question no.(iv) is answered in the affirmative and in favour of the assessee and the question no.(v) is answered in the negative and in favour of the assessee.
The appeal is, thus, disposed of.
(GIRISH CHANDRA GUPTA, J.) (SHIB SADHAN SADHU, J.) sd/