Case Law Details
Fenner (India) Limited Vs ACIT (Madras High Court)
High Court court is of the view that the Tribunal has rightly directed the assessing officer to exclude the royalty income from the business profits for the purpose of calculation of deduction under section 80HHC of the Act, which warrants no interference.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This is an appeal filed by the assessee against the order of the Income Tax Appellate Tribunal dated 31.03.2009 in I.T.A.No.1588/Mds/2007.
2. The appellant is engaged in the business of manufacture and sale of V & Fan Belts, Oil Seals etc. For the assessment year 2004-2005, they filed its return on 01.11.2004 admitting a total income of Rs.14,02,65,870/-, which was subsequently, revised by them on 20.09.2005, admitting the income at Rs.13,93,08,090/-. Upon scrutiny of the same, the respondent issued notice under section 143(2) of the Income Tax Act, 1961 (in short, “the Act”) and thereafter, completed the assessment under section 143(3) on 20.12.2006 determining the total income at Rs.14,67,27,610/- which excludes long term capital gains. While doing so, the assessing officer among others, restricted the claim of deduction under section 80HHC by excluding 90% of the royalty receipts from the profits of the business under clause (baa) to explanation to section 80HHC(4). Challenging the order of assessment passed by the assessing officer, the appellant preferred an appeal before the Commissioner of Income Tax (Appeals)-I, Madurai, who, by order dated 15.03.2007, partly allowed the appeal filed by the appellant. Aggrieved over the same, the Revenue went on appeal before the ITAT. By order dated 31.03.2009, the Tribunal set aside the order of the CIT(A) and directed the assessing officer to exclude the receipt of royalty from business profits for the purpose of deduction under section 80HHC of the Act. Therefore, the appellant is before this court with this tax case appeal.
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