THE COMMISSIONER OF INCOME TAX vs. M/S.BABA CASHEW INDUSTRIES, MANGAD

Aggrieved by the assessment order the assessee filed appeal before the first appellate authority. The first appellate authority directed to exclude processing charges from total turnover and to deduct 90% of net processing charges from profits of the business. of 2000 dated 13-2-2003) has held that the processing of raw nuts is a business income as far as the assessee is concerned and therefore it cannot be segregated from business income. Regarding the issue of set off of negative profits against positive elements while computing -3- Nos.236,237, 238 of 1998 dated 21-6-2003) has decided the issue in favour of the assessee. Aggrieved by the order of the Tribunal, the Revenue has preferred this appeal.

The Revenue has framed the following questions of law for our consideration and consequent decision. They are:- “1. Whether, on the facts and in the circumstances of the case while completing the relief under section 80 HHC of the Income Tax Act, the processing charges could be excluded from the turnover of the business?

Whether, on the facts and in the circumstances of the case, and in view of Explanation (ba) to Section 80 HHC and clauses (iiia), (iiib) and (iiic) of section 28, will not turnover take into account all other receipts other than the excluded items of receipts?

Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that set off of negative profits against positive elements is permissible in -4- computing deduction under section 80 HHC of the Income Tax Act?

The appeal was filed as early as on 10th day of November, 2003 and since the Registry had pointed out certain defects in filing the appeal and since they were cured only in the year 2008, the appeal is now posted before us for admission.

The learned counsel for the appellant would submit that the issues raised in this appeal is now covered by a recent decision of the Apex Court and therefore, we should admit this appeal and issue notice to the respondent. We are not inclined to accept the submission made by the learned counsel for the Revenue.

The Tribunal had allowed the assessee's appeal and dismissed the Revenue's cross objection by an order passed in the month of June, 2003. Nearly after five years from the date of the order, if we have to issue notice to the respondent only because, the Revenue was not diligent in prosecuting the appeal filed in the year 2003, in our view, it could cause great prejudice and injustice to the assessee/respondent.

In that view of the matter, we decline to entertain this appeal. Accordingly, the appeal is disposed of. However, we grant -5- liberty to the Revenue to make an appropriate application/review petition before the tribunal for appropriate orders.. Ordered accordingly.