THE COMMISSIONER OF INCOME TAX vs. M/S MOTOR INDUSTRIES CO LTD

ITA/86/2007HC KarnatakaKAHC01022345200726 September 2012Bench: B.MANOHAR,K.SREEDHAR RAO2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the question of law framed is against the Revenue. The Court referred to its own judgment in ITA No.28/2005 dated 4.8.2010. Based on this prior judgment, the High Court found that the Appellate Authorities were correct in their holding. The implication is that 90% of the sum of Rs.2,70,18,366/- was indeed to be excluded for the purpose of computation of deduction under Section 80HHT of the Act, as it was considered to have accrued in the course of business. The ratio decidendi is that the interpretation of Explanation (1) to clause (baa) of Section 80HHT, as applied by the ITAT, is upheld by the High Court. The appeal filed by the Revenue is dismissed.

What were the facts?

The appeal is filed by the Revenue against the order dated 06-07-2006 passed by the Income Tax Appellate Tribunal (ITAT), Bangalore in ITA No.2665/Bang/2004. The assessee is M/s Motor Industries Co Ltd. The dispute pertains to the assessment year(s) not explicitly stated in the provided text. The core issue revolves around the computation of deduction under Section 80HHT of the Income Tax Act, 1961, specifically concerning the exclusion of a sum of Rs.2,70,18,366/-. The Revenue challenges the appellate authorities' decision to allow a 90% exclusion for this sum.

What were the issues?

1. Whether the Appellate Authorities were correct in holding that out of the sum of Rs.2,70,18,366/-, 90% cannot be excluded for the purpose of computation of deduction under Section 80HHT of the Act in accordance with Explanation (1) to clause (baa) of Section 80HHT of the Act, as the same would not accrue in the course of business? Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The Revenue argues that 90% of the sum of Rs.2,70,18,366/- should not be excluded for the purpose of computing deduction under Section 80HHT, as this amount did not accrue in the course of business, contrary to the interpretation of Explanation (1) to clause (baa) of Section 80HHT.

Which sections of the Income-tax Act were involved?

Section 80HHT

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 26TH DAY OF SEPTEMBER 2012 PRESENT THE HON'BLE MR. JUSTICE K.SREEDHAR RAO AND THE HON'BLE MR. JUSTICE B.MANOHAR ITA No.86/2007 BETWEEN : 1 THE COMMISSIONER OF INCOME TAX C R BUILDING QUEENS ROAD, BANGALORE

2 THE ASSISTANT COMMISISONER OF INCOME TAX CIRCLE 12-1, BANGALORE. APPELLANTS ( By Sri. K V ARAVIND, ADV.) AND : M/S MOTOR INDUSTRIES CO LTD HOSUR ROAD, ADUGODI BANGALORE. ..RESPONDENT ( By Sri. M/S KING & PARTRIDGE )

2 I.T.A. Is filed u/S.260-A of I.T.Act 1961 arising out of order dated 06-07-2006 passed in ITA No.2665/Bang/2004 passed by the ITAT, Bangalore This ITA coming on for hearing this day, K.SREEDHAR RAO, J, delivered the following: JUDGMENT

In view of the judgment of this Court in ITA No.28/2005 (DD 4.8.2010), the question of law, which is framed as under, is held against the revenue. Whether the Appellate Authorities were correct in holding that out of the sum of Rs.2,70,18,366/- 90% cannot be excluded for the purpsoe of computation of deduction under Section 80HHT of the Act in accordance with Explanation (1) to clause (baa) of Section 80HHT of the Act as the same would not receive in the course of business? Accordingly, the appeal is dismissed. (Sd/-) JUDGE (Sd/-) JUDGE bkm.

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