COMMISSIONER OF INCOME TAX Vs. SHARP INDUSTRIES

JUDGEMENT

(1.) THE present appeal is filed under Section 260-A of the Income Tax Act, 1961 by the Revenue, against the Order of the Income Tax Appellate Tribunal, madras, "d" Bench dated 30. 06. 2005 in I. T. A. No. 530/mds/2 002, for the assessment year 1993-94, raising the following substantial question of law. "whether on the facts and circumstances of the case, the Income Tax Appellate tribunal was right in holding that the assessee is entitled to deduction in respect of interest income under Section 80hhc and 80 I of the Income Tax act?"

(2.) THE assessment year is 1993-94. The assessee firm is a manufacturer and seller of HP Monoblock pumps. Their claim with regard to deduction under Section 80hhc and 80i of the Income Tax Act was disallowed under Section 154 of the Act. Aggrieved by the said order, the assessee filed an appeal before the Commissioner of Income Tax (Appeal), who allowed the appeal. The Appellate Tribunal dismissed the appeal filed by the Revenue on the ground that the issue for consideration is outside the purview of Section 154 of the Act and therefore, the claim cannot be disallowed in a proceeding under Section 154 of the Act. Aggrieved by the same, the Revenue has preferred this appeal.

(3.) IT is fairly submitted by the learned counsel for the Revenue that the issue raised in the question is covered against the Revenue by the decision of this Court in Commissioner of Income Tax Vs. N. S. Shoes (2002) (258 ITR 749), wherein it is held that the interest income is also eligible for deduction provided it is included in the computation of profit and gains of the business.