COMMISSIONER OF INCOME TAX Vs. PFIZER LTD

JUDGEMENT

(1.) The Appeal by the Revenue under Section 260A of the Income Tax Act, 1961 has raised the following questions of law:

(2.) The dispute in the present case relates to Assessment Year 2000-01.

(3.) The assessee engages in the manufacture of pharmaceuticals and animal health products. For the Assessment Year in question the assessee claimed a deduction under Section 80HHC. The Assessing Officer, while computing the deduction excluded 90% of the amount of an insurance claim which was related to the stock in trade of the assessee. The Commissioner (Appeals) confirmed the order of the Assessing Officer. The Tribunal noted that for Assessment Year 1998-99 it had come to the conclusion that there was no justification to exclude 90% of the insurance claim. Besides this, the Tribunal held that the insurance claim formed part of the income of the business of the assessee and was liable to be considered as part of the profits of the business in view of Explanation (baa) to Section 80HHC. The Tribunal was of the view that the insurance claim was not in the nature of brokerage, commission, interest, rent or charges and therefore was not any other receipt of a similar nature within the meaning of Explanation (baa). The Tribunal, therefore, held that 90% of the insurance claim could not be excluded.