Banpal Oilchem Pvt.Ltd.,, Palanpur v. The ACIT.,B.K. Circle,, Palanpur

ITA 145/AHD/2008 | 2004-2005
Pronouncement Date: 30-04-2010 | Result: Partly Allowed

Appeal Details

RSA Number 14520514 RSA 2008
Assessee PAN EMBER1991O
Bench Ahmedabad
Appeal Number ITA 145/AHD/2008
Duration Of Justice 2 year(s) 3 month(s) 22 day(s)
Appellant Banpal Oilchem Pvt.Ltd.,, Palanpur
Respondent The ACIT.,B.K. Circle,, Palanpur
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 30-04-2010
Date Of Final Hearing 29-04-2010
Next Hearing Date 29-04-2010
Assessment Year 2004-2005
Appeal Filed On 08-01-2008
Judgment Text
- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE S/SHRI T.K. SHARMA JM AND D.C.AGRAWAL AM BANPAL OILCHEM (P) LTD. 5. FIRST FLOOR GITANJALI COMPLEX PALACE ROAD PALANPUR V/S . A.C.I.T. B.K. CIRCLE PALANPUR. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI TUSHAR HEMANI AR RESPONDENT BY:- SMT. NEETA SHAH SR.DR O R D E R PER D.C. AGRAWAL ACCOUNTANT MEMBER. THIS IS AN APPEAL FILED BY THE ASSESSEE RAISING FO LLOWING GROUNDS :- 1. THE HON. CIT(A) ERRED IN LAW AND IN FACTS IN DIRECT ING TO REDUCE THE INCOME ELIGIBLE FOR DEDUCTION U/S 80IB OF THE A CT OF RS.23 15 921/- FROM THE BUSINESS PROFIT FOR THE CAL CULATION OF DEDUCTION UNDER SECTION 80 HHC THE ACT. 2. THE HON. CIT(A) ERRED IN HOLDING THAT THE AMOUNT OF DEPB CANNOT BE TREATED AS EXPORT INCENTIVE SINCE THE TUR NOVER OF THE ASSESSEE EXCEEDS RS.10 CRORES AND HENCE NOT ELIGIBL E FOR DEDUCTION U/S 80 HHC OF THE ACT. 3. THE HON. CIT(A) ERRED IN LAW AND IN FACTS IN DIRECT ING TO REDUCE 90% OF FOLLOWING INCOME FROM BUSINESS PROFIT FOR TH E CALCULATION OF DEDUCTION UNDER THE ACT. SL. NO. PARTICULARS AMOUNT 1 DEPB INCOME 2110081 ITA NO. 145/AHD/2008 ASST. YEAR :2004-05 2 2 BANK FIXED DEPOSIT INTEREST 41769 3 SALE OF WASTE MATERIAL 180948 4 SALE OF OLD WASTE BARDAN 20800 TOTAL 2353598 4. THE HON. CIT(A) ERRED IN LAW AND IN FACTS IN DIRECT ING TO REDUCE FOLLOWING INCOME FROM THE INCOME OF THE INDUSTRIAL UNDERTAKING ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB THE ACT. SL. NO. PARTICULARS AMOUNT 1 BANK FIXED DEPOSIT INTEREST 41769 2. THE ASSESSEE IS A PRIVATE LTD. COMPANY ENGAGED I N THE BUSINESS OF MANUFACTURE AND EXPORT OF CASTOR OIL AND CAKE. 3. THE FIRST GROUND IS REGARDING REDUCTION OF INCOM E ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB BY RS.23 15 921/-. THI S REDUCTION HAS BEEN MADE ON THE GROUND THAT ASSESSEE IS ALSO ENTITLED T O DEDUCTION UNDER SECTION 80 HHC AND THEREFORE BY INVOKING THE PROVI SIONS OF SECTION 80IA(9) DEDUCTION UNDER SECTION 80 HHC TO THE EXTEN T WILL NOT BE AVAILABLE OR VICE-VERSA. 4. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE MATERIAL ON RECORD. WE ARE OF THE CONSIDERED VIEW THAT THE ISSU E WHICH IS NOW COVERED BY THE DECISION OF ITAT DELHI SPECIAL BENCH IN THE CASE OF ACIT VS. HINDUSTAN MINT AND AGRO PRODUCTS (P) LTD.( 2009) 315 ITR(AT) 401 ITAT(DEL)(SB). ACCORDINGLY WE CONFIRM THE ORDER OF LD. CIT(A) AND DISMISS THIS GROUND OF ASSESSEE. 3 5. THE NEXT ISSUE IS REGARDING REDUCING AMOUNT OF D EPB FOR THE PURPOSES OF DEDUCTION UNDER SECTION 80 HHC. 6. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE RECORD. IN OUR CONSIDERED VIEW THE ISSUE IS NOW FULLY COVERED BY THE DECISION OF ITAT MUMBAI SPECIAL BENCH IN THE CASE OF TOPMAN EXPORTS VS. ITO 318 ITR 87(AT)(MUM)(SB). RESPECTFULLY FOLLOWING THE ABOVE D ECISION WE RESTORE THE MATTER TO THE FILE OF AO TO WORK OUT AL LOWABLE DEDUCTION IN ACCORDANCE WITH DECISION OF ITAT SPECIAL BENCH IN T HE CASE OF TOPMAN EXPORTS VS. ITO (SUPRA). THIS GROUND OF ASSESSEE IS THEREFORE ALLOWED BUT FOR STATISTICAL PURPOSES. 7. THE THIRD GROUND RELATES TO REDUCING 90% OF VARI OUS AMOUNTS WHILE WORKING OUT DEDUCTION UNDER SECTION 80 HHC. THESE A MOUNTS ARE IN THE NATURE MENTIONED IN GROUND NO.3 ABOVE. 8. WE HAVE HEARD THE PARTIES AND CONSIDERED THE MAT ERIAL ON RECORD. THE ISSUE REGARDING DEPB INCOME OF RS.21 10 031/- I S COVERED BY THE DECISION OF ITAT MUMBAI SPECIAL BENCH IN TOPMAN EXP ORTS VS. ITO (SUPRA). WE RESTORE THE MATTER TO THE FILE OF AO TO COMPUTE THE AVAILABLE DEDUCTION IN ACCORDANCE WITH THE DECISION IN TOPMAN EXPORTS VS. ITO CASE (SUPRA). 9. THE NEXT ISSUE IS REDUCTION OF 90% OF BANK F.D. INTEREST OF RS.41 769/-. 10. THE LD. AR REQUESTED THIS BENCH TO ALLOW NETTIN G IN VIEW OF THE DECISION OF HON. DELHI HIGH COURT IN THE CASE OF CI T VS. SHRI RAM HONDA POWER EQUIPMENT & ORS 289 ITR 475 (DEL). 4 11. WE HAVE HEARD THE LD. DR. 12. IN OUR CONSIDERED VIEW THE NETTING AS SUCH WOUL D NOT BE ALLOWED UNLESS IT IS PROVED THAT INTEREST INCOME WAS ASSESS ABLE UNDER THE HEAD BUSINESS. PRIMA FACIE INTEREST IS EARNED ON FDR WHI CH IS ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES. THEREFORE CO NSIDERING THE QUESTION OF ANY NETTING AGAINST INTEREST EXPENDITUR E DEBITED IN THE PROFIT AND LOSS ACCOUNT WOULD NOT ARISE. HOWEVER WE RESTO RE THE MATTER TO THE FILE OF AO TO GIVE A FINDING AS TO WHETHER INTEREST EARNED ON BANK FDR IS BUSINESS INCOME OR INCOME FROM OTHER SOURCES. I F IT IS HELD THAT IT IS AN INCOME FROM OTHER SOURCES THEN NO NETTING AGAINST INTEREST EXPENDITURE SHOULD BE ALLOWED. IF IT IS HELD TO BE INCOME FROM BUSINESS THEN AO WILL GIVE OPPORTUNITY TO THE ASSESSEE TO ESTABLISH NEXUS BETWEEN THE INTEREST INCOME EARNED ON FDR AND INTEREST EXPENDITURE AND I F ASSESSEE IS ABLE TO ESTABLISH SUCH NEXUS ONLY THEN NETTING SHOULD BE CO NSIDERED. OUR VIEW IS SUPPORTED BY THE DECISION OF HON. DELHI HIGH COURT IN CIT VS. DELHI GRASS METAL WORKS LTD. (2009) 313 ITR 352 (DEL) WHE REIN IT IS HELD THAT INTEREST EARNED ON FD IS TO BE TREATED AS INCOME F ROM OTHER SOURCES AND INTEREST PAID TO BANK ON OVER-DRAFT FACILITIES IS N OT AN EXPENDITURE LAID DOWN WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF EAR NING INTEREST ON FDRS AND ACCORDINGLY BENEFIT OF NETTING IS NOT ALLO WABLE. 13. THE LD. AR HAS RELIED ON THE DECISION OF HON. D ELHI HIGH COURT IN CIT VS. SHRI RAM HONDA POWER EQUIPMENT & ORS 289 ITR 475 (DEL). THIS DECISION WAS CONSIDERED BY HON. BOMBAY HIGH COURT IN CIT VS. M/S ASIAN STAR CO. LTD. IN ITA NO.200 OF 20 09 PRONOUNCED ON 18 TH /19 TH MARCH 2010 WHEREIN IT IS HELD THAT NETTING WOULD NOT BE AVAILABLE WITHOUT THERE BEING ANY NEXUS. THE HON. B OMBAY HIGH COURT DIFFERED FROM THE VIEW EXPRESSED IN CIT VS. S HRI RAM HONDA 5 POWER EQUIPMENT & ORS. (SUPRA). IN THIS REGARD WE R EFER TO PARA NOS.19 20 & 21 FROM THAT JUDGMENT AS UNDER :- 19 RELIANCE IS HOWEVER SOUGHT TO BE PLACED ON B EHALF OF THE ASSESSES UPON THE JUDGMENT OF A DIVISION BENCH OF THE DELHI HIGH COURT IN CIT VS. SHRI RAM HONDA POWER EQUIP. 9 ONE OF THE ISSUES WHICH CAME UP FOR DECISION IN THE APPEAL WAS WHETHER THE EXPRESSION ' INTEREST' IN EXPLANATION BAA CONNOTES NET INTEREST AS GROSS INCO ME LESS EXPENDITURE INCURRED BY THE ASSESSEE FOR EARNING SUCH INCOME. T HE DELHI HIGH COURT HELD THAT THE JUDGMENT OF THE SUPREME COURT IN DIST RIBUTORS (BARODA) (SUPRA) WOULD FULLY COVER THE QUESTION AS TO WHETHE R THE DEDUCTION WHICH IS TO BE EFFECTED UNDER EXPLANATION BAA WAS OF THE ENTIRE INTEREST RECEIVED OR OF THE INTEREST LESS THE EXPENDITURE INCURRED BY THE ASSESSEE FOR EARNING SUCH INCOME. OBSERVING THAT THE WORDS USED IN SEC TION 80HHC WERE SIMILAR TO THOSE IN SECTION 80M THE DELHI HIGH COU RT HELD THUS: 'THE EXPRESSION 'BY WAY OF WHICH QUALIFIED THE WOR D INCOME' IN SECTION 80M IS SIMILAR TO THE WORDS 'RECEIPTS BY WA Y OF OCCURRING IN THE EXPLANATION (BAA) OF SECTION 80HHC OF THE AC T. FURTHER THE WORDS 'INCLUDED IN SUCH PROFITS' OCCURS IN BOTH THE PROVISIONS. JUST AS IN DISTRIBUTORS (BARODA) [1985] 155 ITR 120 (SC) WHERE IT WAS EXPLAINED BY THE HON'BLE SUPREME COURT THAT THE -WO RDS 'SUCH' PROFITS CAN ONLY BE UNDERSTOOD AS 'COMPUTED IN ACCO RDANCE WITH THE PROVISIONS OF THE ACT WE ARE OF THE VIEW THAT SIMILAR WORDS IN CLAUSE (BAA) SHOULD PARTAKE OF THE SAME MEANING. AP PLYING THE RATIO OF DISTRIBUTORS (BARODA) [1985] 155 ITR 120 ( SC) WE HOLD THAT THE LEGISLATIVE INTENT IN USING THE WORD 'INTE REST' IN CLAUSE (BAA) TO THE EXPLANATION IN SECTION 80HHC IS INDICA TIVE OF 'NET INTEREST' I.E. GROSS INTEREST LESS THE EXPENDITUR E INCURRED BY THE ASSESSEE IN EARNING SUCH INTEREST ' THE DELHI HIGH COURT WAS OF THE VIEW THAT WHERE THE PLAIN OR LITERAL INTERPRETATION OF A STATUTE WOULD PRODUCE AN UNINTE NDED OR ABSURD RESULT THE LITERAL CONSTRUCTION SHOULD NOT BE ADOPTED. ACC ORDING TO THE DELHI HIGH COURT THE WORDS 'INCLUDED ANY SUCH PROFITS' W AS A CLEAR POINTER TO THE FACT THAT ONLY NET INTEREST WOULD BE INCLUDIBLE IN ARRIVING AT THE BUSINESS PROFIT. THE DELHI HIGH COURT ALSO HELD THA T UNLESS NETTING WERE TO BE PERMITTED IT WOULD NOT BE IN 'SYNC' WITH THE ENTIRE SECTION. THE CONTENTION OF THE ASSESSEE WAS THAT IF THE DEDUCTIO N OF NINETY PER CENT IS OF GROSS INTEREST ITSELF THE AMOUNTS SPENT IN EARNING SUCH INTEREST WILL REMAIN ON THE DEBIT SIDE OF THE PROFIT AND LOSS ACC OUNT AND WILL DEPRESS 6 THE PROFITS TO THAT EXTENT. THIS SUBMISSION WAS ACC EPTED WITH THE OBSERVATION THAT THE IDEA OF SECTION 80HHC WAS TO E NSURE THAT THE EXPORTER GETS BENEFIT FROM THE PROFITS DERIVED FROM EXPORT AND NOT TO DEPRESS THE PROFITS FURTHER. HENCE ACCORDING TO TH E HIGH COURT IT CAN ONLY BE NET INTEREST WHICH CAN HE INCLUDED IN THE P ROFITS AND IF NETTING WERE NOT TO BE PERMITTED THE RESULT WOULD BE THAT THE PROFITS OF THE EXPORTER WOULD HE DEPRESSED BY AN ITEM THAT IS EXPE NDITURE INCURRED ON EARNING INTEREST WHICH DOES NOT FORM PAN OF THE PRO FITS AT ALL. 20 HAVING GIVEN A CAREFUL CONSIDERATION TO THE JUD GMENT OF THE DELHI HIGH COURT WE ARE NOT INCLINED TO FOLLOW THE VIEW FOR A NUMBER OF REASONS. THE SUBSTRATUM OF THE JUDGMENT OF THE DELH I HIGH COURT PROCEEDS ON THE BASIS THAT THE QUESTION AS TO WHETH ER NETTING SHOULD BE PERMISSIBLE STANDS CONCLUDED BY THE JUDGMENT OF THE SUPREME COURT IN DISTRIBUTORS (BARODA). IN DISTRIBUTORS (BARODA) WH ILE CONSIDERING THE PROVISIONS OF SECTION 80M THE SUPREME COURT INTERP RETED THE WORDS 'WHERE THE GROSS TOTAL INCOME OF THE ASSESSEE BEING A COMPANY INCLUDED ANY INCOME BY WAY OF DIVIDEND RECEIVED' AND THE WOR DS WHICH PROVIDED THAT HI COMPUTING THE TOTAL INCOME OF THE ASSESSEE 'A DEDUCTION FROM SUCH INCOME BY WAY OF DIVIDEND' SHALL BE ALLOWED TO THE EXTENT SPECIFIED IN THE PROVISION. WHILE APPLYING THE RATIO OF THE JUDGMENT IN DISTRIBUTORS (BARODA} WE HAVE OBSERVED THAT THE EXPRESSION 'REC EIPTS OF A SIMILAR NATURE INCLUDED IN SUCH PROFITS' IN EXPLANATION BAA TO SECTION 80HHC MUST REFER TO RECEIPTS WHICH FORM A PART OF THE COM PUTATION UNDER THE HEAD OF PROFITS AND GAINS OF BUSINESS OR PROFESSION UNDER SECTIONS 28 TO 44D OF THE INCOME TAX ACT 1961. THE EXPRESSION 'SU CH PROFITS' THEREFORE FOLLOWING THE RATIONALE IN DISTRIBUTORS BARODA MUST REFER TO THE COMPUTATION OF PROFITS AND GAINS OF BUSINESS OR PROFESSION IN ACCORDANCE WITH THE AFORESAID PROVISIONS OF THE ACT BUT THE SIMILARITY BETWEEN THE PROVISIONS OF SECTIONS 80HHC AND 80M WH ICH IS RELIED UPON IN THE JUDGMENT OF THE DELHI HIGH COURT WOULD MISS THE COMPREHENSIVE POSITION AS IT OBTAINS UNDER SECTION 80HHC. THE SIM ILARITY OF THE PROVISIONS SHOULD NOT RESULT INTO AN ASSUMPTION THA T THE PROVISIONS ARE IDENTICAL WHEN THEY ARE NOT. SECTION 80 HHC IS A P ROVISION WHICH IS INTENDED TO PROVIDE AN INCENTIVE FOR EXPORT. PARLIA MENT THEREFORE EXPRESSED A LEGISLATIVE INTENT TO EXCLUDE ITEMS WHI CH WERE UNRELATED TO EXPORT TURNOVER FROM THE COMPUTATION OF THE DEDUCTI ON AND THE APPLICATION OF THE FORMULA. WHILE EXCLUDING SUCH IT EMS WHICH ARE UNRELATED TO EXPORT FOR THE PURPOSES OF SECTION 80H HC PARLIAMENT HAS TAKEN DUE NOTE OF THE FACT THAT THE EXPORTER ASSESS EE WOULD HAVE INCURRED SOME EXPENDITURE IN EARNING THE RECEIPTS. THE EXPEN DITURE WOULD HAVE GONE INTO THE COMPUTATION OF PROFITS AND GAINS OF B USINESS OR PROFESSION 7 SINCE THE COMPUTATION OF BUSINESS PROFITS UNDER CHA PTER IV OF THE ACT IS MADE BY AMALGAMATING THE RECEIPTS AS WELL AS EXPEND ITURE INCURRED IN CARRYING ON THE BUSINESS. PARLIAMENT HOWEVER LEGI SLATED THAT IN ORDER TO REMOVE A CAUSE FOR DISTORTION THE REDUCTION TO BE EFFECTED OF RECEIPTS SUCH AS BROKERAGE COMMISSION AND INTEREST SHOULD BE CONFINED TO NINETY PER CENT OF THOSE RECEIPTS. IN PROVIDING A SIMPLIFI ED FORMULA IN THESE TERMS PARLIAMENT EVIDENTLY ADOPTED A FAIR AND REAS ONABLE STATUTORY BASIS OF WHAT MAY BE REGARDED AS EXPENDITURE INCURRED FOR THE EARNING OF THE RECEIPTS. ONCE PARLIAMENT HAS LEGISLATED BOTH IN RE GARD TO THE NATURE OF THE EXCLUSION AND THE EXTENT OF THE EXCLUSION IT W OULD NOT BE OPEN TO THE COURT TO ORDER OTHERWISE BY REWRITING THE LEGISLATI VE PROVISION. THE TASK OF INTERPRETATION IS TO FIND OUT THE TRUE INTENT OF A LEGISLATIVE PROVISION. UNDOUBTEDLY IN DEALING WITH A PROVISION BY WAY OF AN INCENTIVE THE COURT MUST ADOPT A BROAD AND LIBERAL INTERPRETATION WHICH WOULD ADVANCE THE PURPOSE. WHILE DOING SO THE COURT IS D UTY BOUND TO IRON OUT THE CREASES BUT IT IS CLEARLY NOT OPEN TO THE COUR T RO LEGISLATE BY SUBSTITUTING A FORMULA OR PROVISION OTHER THAN WHAT HAS BEEN LEGISLATED BY PARLIAMENT. THE DELHI HIGH COURT WITH RESPECT HAS NOT ADEQUATELY EMPHASIZED THE ENTIRE RATIONALE FOR CONFINING THE D EDUCTION ONLY TO THE EXTENT OF NINETY PER CENT OF THE EXCLUDIBLE RECEIPT S. WHILE THE JUDGMENT OF THE DELHI HIGH COURT REFERRED TO THE C.B.D.T. CIRCU LAR DATED 19 DECEMBER 1991 AS NOTED EARLIER WE HAVE ALSO ADVER TED TO THE MEMORANDUM EXPLAINING THE CLAUSES OF THE FINANCE BI LL OF 1991. THE MEMORANDUM CAN BE RELIED UPON AS A LEGITIMATE INSTR UMENT OF STATUTORY INTERPRETATION AND TO SHED LIGHT UPON THE PROVISION S OF EXPLANATION BAA 21. BEFORE CONCLUDING IT WOULD BE NECESSARY TO NOT E THAT THE DELHI HIGH COURT AFFIRMED THE JUDGMENT OF A SPECIAL BENCH OF I NCOME TAX APPELLATE TRIBUNAL IN THE CASE OF LALSONS. THE TRIBUNAL IN TH E COURSE OF ITS DECISION ADVERTED TO THE DEDUCTION OF TEN PER CENT ALLOWED B Y PARLIAMENT IN EXPLANATION BAA WHILE LEGISLATING THAT ONLY NINETY PER CENT OF THE RECEIPTS UNRELATED TO EXPORT TURNOVER WOULD BE EXCLUDED FROM THE PROFITS OF BUSINESS. THE TRIBUNAL OBSERVED THAT THE ALLOWANCE OF TEN PER CENT HAD BEEN MADE BY PARLIAMENT ONLY FOR MEETING COMMON EXP ENSES ACCORDING TO CIRCULAR 621 DATED 19 DECEMBER 1991 OF THE CBDT. IN LALSONS THE TRIBUNAL OBSERVED THAT IN ADDITION TO SUCH COMMON E XPENSES THERE MAY BE OTHER EXPENSES WHICH HAVE A DIRECT BEARING ON EX CLUDABLE RECEIPTS. THE TRIBUNAL HELD THAT IF SUCH RECEIPTS WERE TO BE TAKEN OUT OF THE BUSINESS PROFITS ON THE FOOTING THAT THEY HAD NO CO NNECTION WITH THE BUSINESS PROFITS OR TURNOVER IT WOULD ONLY BE REAS ONABLE TO HOLD THAT EXPENDITURE HAVING NEXUS WITH SUCH RECEIPTS SHOULD ALSO BE TAKEN OUT OF THE BUSINESS PROFITS ON THE SAME FOOTING. THE TRIBU NAL NOTED THAT THE USE 8 OF THE WORD 'RECEIPTS' 1 WOULD NOT REFER TO GROSS RECEIPTS BECAUSE THE LEGISLATURE HAD NOT USED THE WORDS 'GROSS' NOR 'NET '. WE ARE AFFIRMATIVELY OF THE VIEW THAT IN ITS DISCUSSION ON THE ISSUE OF NETTING THE TRIBUNAL IN ITS SPECIAL BENCH DECISION IN LALSONS HAS TRANSGRESSED THE LIMITATIONS ON THE EXERCISE OF JUDICIAL POWER. THE TRIBUNAL HAS IN EFFECT LEGISLATED BY PROVIDING A DEDUCTION ON THE GROUND O F EXPENSES OTHER THAN IN THE TERMS WHICH HAVE BEEN ALLOWED BY PARLIAMENT. THAT IS IMPERMISSIBLE. IN THE PRESENT CASE IT IS NECESSARY TO EMPHASIZE THAT THE QUESTION BEFORE THE COURT RELATES TO THE DEDUCTION UNDER SECTION 80HHC AN ASSESSEE MAY WELL BE ENTITLED TO A DEDUCTION IN RESPECT OF THE EXPENDITURE LAID OUT WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS IN THE COMPUTATION OF THE PROFITS AND GAINS OF BUSINES S OR PROFESSION. HOWEVER FOR THE PURPOSES OF COMPUTING THE DEDUCTIO N UNDER SECTION 80HHC THE PROVISIONS WHICH HAVE BEEN ENACTED BY PA RLIAMENT WOULD HAVE TO BE COMPLIED. A DEDUCTION IN EXCESS OF WHAT IS MANDATED BY PARLIAMENT CANNOT BE ALLOWED ON THE THEORY THAT IT IS AN INCENTIVE PROVISION INTENDED TO ENCOURAGE EXPORT. THE EXTENT OF THE DEDUCTION AND THE CONDITIONS SUBJECT TO WHICH THE DEDUCTION SHOUL D HE GRANTED ARE MATTERS FOR PARLIAMENT TO LEGISLATE UPON. PARLIAMEN T HAVING LEGISLATED IT WOULD NOT BE OPEN TO THE COURT TO DEVIATE FROM THE PROVISIONS WHICH HAVE BEEN ENACTED IN SECTION 80HHC. 14. THE THIRD AND FOURTH ITEMS RELATE TO SALE OF WA STE MATERIAL AND SALE OF OLD BARDAN ON WHICH DEDUCTION UNDER SECTION 80IA HAS BEEN CLAIMED. 15. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW THIS ISSUE IS NOW CO VERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HON. GUJARAT HIGH COURT IN THE CASE OF DCIT VS. HARJIVANDAS JUTHABHAI ZABERI (2002) 258 ITR 785 (GUJ) WHEREIN IT IS HELD THAT AMOUNT RECEIVED ON SALE OF EMPTY SODA ASH VARDANA EMPTY BARRELS AND PLASTIC WASTE QUALIFY FOR DEDUCTION UND ER SECTION 80I. FOLLOWING THE ABOVE DECISION OF HON. GUJARAT HIGH C OURT WE ALLOW THE CLAIM OF ASSESSEE. THE CONCERNED GROUNDS OF ASSESSE E ARE ALLOWED. 16. THE LAST ISSUE IS REGARDING REDUCTION OF INTERE ST INCOME OF RS.41 769/- FOR THE PURPOSES OF DEDUCTION UNDER SEC TION 80IB. IT IS 9 UNDISPUTED FACT THAT INTEREST INCOME IS EARNED ON F DR. PRIMA FACIE THERE IS NO CASE FOR ALLOWING DEDUCTION BECAUSE INCOME F ROM FDR IS TO BE ASSESSED AS INCOME FROM OTHER SOURCES. HOWEVER KE EPING CONSISTENCY WITH GROUND NO.3(B) WE RESTORE THE MATTER TO THE FI LE OF AO WHO WILL GIVE FINDING WHETHER INTEREST INCOME FROM FDR IS INCOME FROM OTHER SOURCES OR INCOME FROM BUSINESS. IF IT IS INCOME FROM BU SINESS ONLY THEN THIS SHOULD BE CONSIDERED FOR DEDUCTION UNDER SECTION 80 IB OTHERWISE NOT. 17. AS A RESULT APPEAL FILED BY THE ASSESSEE IS PA RTLY ALLOWED AND PARTLY ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (T.K. SHARMA) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD DATED : 30/4/2010 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR INCOME-TAX APPELLATE TRIBUNAL ORDER PRONOUNCED IN OPEN COURT ON 30/4/2010