The Commissioner of Income Tax 2 vs. Pentakota Venkata Rao

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 11 / 2005 Gem India Exports ----Appellant Versus Income Tax Officer Jaipur ----Respondent _____________________________________________________ For Appellant(s) : Mr. T.C. Jain For Respondent : Mr. Anuroop Singhi _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VINIT KUMAR MATHUR Judgment 17/01/2017 1. By way of this appeal, the appellant has assailed the judgment and order of the Tribunal whereby Tribunal has dismissed the appeal filed by the aseessee and confirmed the order of CIT(A) & AO. 2. This court while admitting the appeal on 28.1.2005 had framed following substantial questions of law:- “Whether in the facts and in the circumstances of the case, the Hon’ble ITAT was legally correct in upholding the order of ld. CIT(A) that interest income received by appellant is to be assessed as income from other source?. ”Whether in the facts and in the circumstances of the case, the Hon’ble ITAT was correct in not allowing the claim for netting of the interest amount received and paid and to allow deduction of excess interest of Rs.1,83,488/- as business expenditure?” 3. In view of the settled legal position, both the issues are

(2 of 2) [ITA-11/2005] squarely covered by decision of this court in M/s. Reliance Trading Corporation vs. The ITO, Ward No.2(3), Jaipur & Anr. decided on 1.5.2015 reported in (2015) 376 ITR 53 wherein it has been held as under:- “41. While applying the direct and proximate nexus test, we are of the view that where the interest earned does not have direct and proximate nexus, with the income from the business of export, the interest cannot be deducted as income from export under Section 80HHC (3)(a) of the Act, and has to be given the same treatment for tax, as “income from other sources” under Section 56 of the Act. 42. The question No.1 is, thus, answered in favour of the Revenue, and against the assessee.” 4. The issue is answered in favour of the revenue and against the assessee. 5. The appeal stands dismissed. (VINIT KUMAR MATHUR)J. (K.S. JHAVERI)J. Brijesh 20.