COMMISSIONER OF INCOME TAXV vs KISAN DISCRETIONERY FAMILY TRUST

Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Income Tax Appellate Tribunal, Ahmedabad Bench ''C'' (hereinafter referred to as "Tribunal") in Cross Objection No.158/Ahd/2007 for AY 200001, by which the learned ITAT has modified the order of the learned CIT(A) and thereby directing exclusion of incomes arising from FD interest, FD interest against L/C margin, Rent income, Service charges and insurance claim while allowing deduction under Section 80IA of the Income Tax Act, 1961 (hereinafter referred to as "IT Act"), the Revenue has preferred the present Tax Appeal to consider the following questions of law. "Whether the Tribunal below committed substantial error of law in modifying the order of the Commissioner of Income Tax (Appeals) and thereby directing exclusion of net income arising out of the fixed deposit interest again L/C margin, rent income, service charges and insurance claim while allowing deduction under Section 80IA of the Act?"

Today, when the present Appeal is taken up for final hearing, Mrs. Bhatt, learned Advocate appearing on behalf of the Revenue has fairly conceded that the question raised in the present Appeal is squarely covered against the Revenue in view of the decision of the Hon''ble Supreme Court in the case of ACG Associated Capsules (P) Ltd. vs. CIT reported in (2012) 343 ITR 89 and also in view of the subsequent decision of the Division Bench of this Court in the case of Commissioner of Incometax vs. Atul Oilcake Industries Ltd. reported in (2014) 43 Taxmann.com 94 (Gujarat). 2.1 In the case of ACG Associated Capsules (P) Ltd. (Supra), it is held by the Hon''ble Supreme Court that 90% of not the gross interest but only the net interest, which has been included in the profits of the business of the assessee as computed under the heads "Profits and gains of business or profession" is to be deducted under clause (1) of Explanation to Section 80HHC for determining the profits of business.

Applying the law laid down by the Hon''ble Supreme Court in the case of ACG Associated Capsules (P) Ltd. (Supra) and the decision of this Court in the case of Atul Oilcake Industries Ltd. (Supra), the question of law raised in the present Tax Appeal is held against the Revenue.

Consequently, present Tax Appeal deserves to be dismissed and is, accordingly, dismissed. No costs.