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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ON THE 19TH DAY OF NOVEMBER, 2018
BEFORE THE HON'BLE MR. JUSTICE RAVI MALIMATH
AND
THE HON'BLE MR. JUSTICE K. NATARAJAN
INCOME TAX APPEAL No.75 of 2011 c/w INCOME TAX APPEAL No.76 of 2011
BETWEEN
THE COMMISSIONER OF INCOME-TAX,
LTU, JSS TOWERS,
100 FEET RING ROAD,
BANASHANKARI III STAGE,
BANGALORE.
THE ASSISTANT COMMISSIONER OF
INCOME-TAX,
CIRCLE-12(1), C.R. BUILDING,
QUEENS ROAD,
BANGALORE.
... APPELLANTS
(Common in both appeals)
(BY SRI K.V. ARAVIND, ADVOCATE)
AND
M/S. BOSCH LTD., (FORMERLY MOTOR INDUSTRIES CO., LTD.,) HOSUR ROAD, ADUGODI, BANGALORE – 30.
... RESPONDENT
(Common in both appeals)
(BY SRI T. SURYANARAYANA, ADVOCATE)
THE INCOME TAX APPEAL No.75 of 2011 IS FILED UNDER SECTION 260-A OF INCOME TAX ACT, 1961, ARISING OUT OF ORDER DATED 22/10/2010 PASSED IN ITA No.706/BANG/2010, FOR THE ASSESSMENT YEAR 2002-2003, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BANGALORE IN ITA No.706/BANG/2010 DATED 22.10.2010 CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND COMFIRM THE ORDER PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-12(1), BANGALORE.
THE INCOME TAX APPEAL No.76 of 2011 IS FILED UNDER SECTION 260-A OF INCOME TAX ACT, 1961, ARISING OUT OF ORDER DATED 22/10/2010 PASSED IN ITA No.707/BANG/2010, FOR THE ASSESSMENT YEAR 2003-2004, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BANGALORE IN ITA No.707/BANG/2010 DATED 22.10.2010 CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND COMFIRM THE ORDER PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-12(1), BANGALORE.
THESE INCOME TAX APPEALS COMING ON FOR HEARING THIS DAY, RAVI MALIMATH, J., DELIVERED THE FOLLOWING:
J U D G M E N T
Heard.
ITA No.75 of 2011 was admitted to consider the following four substantial questions of law:
“1. Whether the Appellate Authorities were correct in holding that for the purpose of computing deduction u/s. 80HHC of the Act, the income from scrap sales should be excluded from the total turnover?
Whether the Appellate Authorities were correct in holding that for the purpose of computing deduction u/s. 80HHC of the Act, the income from sale of raw material should be excluded from the total turnover?
Whether the Appellate Authorities were correct in holding that fee received from Robert Bosch, Germany need not be reduced
by 90% when computing business profits u/s. 80HHC of the Act as per Explanation (baa) to Section 80HHC of the Act?
Whether the Appellate Authorities were correct in holding that net interest received after deducting expenditure should be reduced by 90% for the purpose of computation of deduction u/s.80HHC of the Act as per Explanation (baa) to Section 80HHC of the Act?”
It is submitted that the first and second substantial questions of law are covered by the judgment of the Hon’ble Supreme Court in the case of COMMISSIONER OF INCOME TAX-VII, NEW DELHI vs. PUNJAB STAINLESS STEEEL INDUSTRIES reported in (2014) 46 taxmann.com 68 (SC). In view of the submission made, the first and second substantial questions of law are answered in favour of the assessee and against the Revenue.
So far as the third substantial question of law is concerned, the same is covered by the judgment of this Court in the case of THE COMMISSIONER OF INCOME TAX AND ANOTHER Vs. M/s. MOTOR INDUSTRIES COMPANY LTD., in ITA No.28 of 2005, disposed off on 04.08.2010. Following the said judgment, the third substantial question of law is answered in favour of the assessee and against the Revenue.
So far as the fourth substantial question of law is concerned, the same is covered by the judgment of the Hon’ble Supreme Court in the case of ACG ASSOCIATED CAPSULES (P) LTD., vs. COMMISSIONER OF INCOME TAX, CENTRAL-IV, MUMBAI reported in (2012) 18 taxmann.com 137 (SC). Following the said judgment, the fourth substantial question of law is answered in favour of the assessee and against the Revenue.
ITA No.76 of 2011 was admitted to consider the following five substantial questions of law:
“1. Whether the Appellate Authorities were correct in holding that the goodwill amount of Rs.17,28,952/- should be treated as an asset and depreciation claim made by the assessee should be allowed?
Whether the Appellate Authorities were correct in holding that for the purpose of computing deduction u/s. 80HHC of the Act, the income from scrap sales should be excluded from the total turnover?
Whether the Appellate Authorities were correct in holding that for the purpose of computing deduction u/s. 80HHC of the Act, the income from sale of raw material should be excluded from the total turnover?
Whether the Appellate Authorities were correct in holding that fee received from Robert Bosch, Germany need not be reduced by 90% when computing business profits u/s. 80HHC of the Act as per Explanation (baa) to Section 80HHC of the Act?
Whether the Appellate Authorities were correct in holding that net interest received after deducting expenditure should be reduced by 90% for the purpose of computation of deduction u/s.80HHC of the Act as per Explanation (baa) to Section 80HHC of the Act?”
It is submitted that the first substantial question of law is covered by the judgment of the Supreme Court in the case of COMMISSIONER OF INCOME TAX, KOLKOTA vs. SMIFS SECURITIES LTD., reported in (2012) 24 taxmann.com 222 (SC). Following the said judgment, the first substantial question of law is held in favour of the assessee and against the Revenue.
The second and third substantial questions of law are covered by the judgment of the Hon’ble Supreme Court in the case of COMMISSIONER OF INCOME TAX-VII, NEW DELHI vs. PUNJAB STAINLESS STEEEL INDUSTRIES
reported in (2014) 46 taxmann.com 68 (SC). Following the said judgment, the second and third substantial questions of law are answered in favour of the assessee and against the Revenue.
So far as the fourth substantial question of law is concerned, the same is covered by the judgment of this Court in the case of THE COMMISSIONER OF INCOME TAX AND ANOTHER Vs. M/s. MOTOR INDUSTRIES COMPANY LTD., in ITA No.28 of 2005, disposed off on 04.08.2010. Following the said judgment, the fourth substantial question of law is answered in favour of the assessee and against the Revenue.
So far as the fifth substantial question of law is concerned, the same is covered by the judgment of the Hon’ble Supreme Court in the case of ACG ASSOCIATED CAPSULES (P) LTD., vs. COMMISSIONER OF INCOME TAX, CENTRAL-IV, MUMBAI, reported in (2012) 18 taxmann.com 137 (SC). Following the said judgment, the
fifth substantial question of law is answered in favour of the assessee and against the Revenue.
The substantial questions of law are accordingly answered.
The appeals are disposed off.
SD/-
SD/- JUDGE
JUDGE