COMMISSIONER OF INCOME TAX Vs. JYOTI OVERSEAS LTD

JUDGEMENT

(1.) THIS is an appeal filed by Revenue (CIT) under Section 260a of the IT Act against an order dt. 19th Sept. , 2000, passed by Income-tax Appellate Tribunal (for brevity hereinafter referred to as Tribunal) in ITA No. 203/ind/2000 This appeal was admitted for final hearing on following substantial question of law :

(2.) HEARD Shri R. L. Jain, learned senior counsel, with Ku. V. Mandlik, learned counsel for the Revenue, and Shri G. M. Chafekar, learned senior counsel, with Shri Sarda, learned counsel for the assessee.

(3.) IN short, the question involved in this appeal is whether Tribunal was justified in holding that assessee is entitled to claim deduction of Rs. 3,08,75,970 under Section 80hhc. While examining this question, the main question that arises for consideration is whether while computing the deduction under Section 80hhc the assessee is entitled to take into consideration (i) the interest said to have been paid by them on export packing credit limit, (ii) interest said to have been paid on term loan obtained for setting up of project, and lastly, depreciation calculated on computer installed or, in other words, the question arises is whether the amount spent by the assessee in aforementioned three heads can be said to be the direct cost or indirect cost as defined in Explanation to Section 80hhc of the Act, dealing with the manufactured items exported by the assessee so as to entitle them to claim deduction under Section 80hhc ibid.