IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.156 of 2008 Date of decision: 16.10.2008 Commissioner of Income Tax, Ludhiana-II. -----Appellant. Vs. M/s Eveline International, Ludhiana. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE L.N. MITTAL Present:- Mr. Rajesh Sethi, Sr. Standing Counsel for the appellant. ----- ORDER: The revenue has preferred this appeal under Section 260A of the Income Tax Act, 1961 (for short, “the Act”) against the order of the Income Tax Appellate Tribunal, Chandigarh Bench ‘A’, Chandigarh passed in I.T.A. No.179/Chandi/2006 dated 24.01.2007 for the assessment year 2003-04. The assessee claimed for deduction under Section 80 HHC of the Act by including premium earned by sale of export incentive. Further claim was for interest income as business income after reducing the same by 90% under explanation (baa) to Section 80 HHC of the Act. The said claim having not been allowed, the assessee preferred an appeal. The CIT (Appeal) allowed the claim of the ITA No.156 of 2008 assessee, which was upheld by the tribunal by following its order in the case of the assessee for the assessment year 2002-03, which was upheld by the Income Tax Appellate Tribunal vide order dated 2.9.2005. On further appeal by the revenue, the Tribunal affirmed the said view with the following observations with regard to the issue of interest, which reasoning also applies for income from sale of export incentive:- “5.2 As regard to the contention of Ld. Sr. D.R. for the revenue that a finding should be given that the interest income earned by the assessee was income from other sources and not as business income, we are of the view that this issue is not arising out of the impugned order. Moreover, while deciding the departmental appeal for the immediately proceeding year assessee’s own case, the Tribunal has observed at page No.5 of the order dated 02.09.2005 in ITA No.898/Chandi/204 (supra) that even if the interest income is taken as business income of the assessee, 90% of the same has to be excluded from the computation of business profit u/s 80 HHC in view of clause (Baa) to subsection (4c) of section 80 HHC. We, therefore, are of the opinion that it was not an issue before the Ld. CIT (A) that the income earned by the assessee was business income or the income from other sources even the Assessing Officer in the assessment order dated 01.10.2004 in para 2.2 has added 10% of the interest income while computing the deduction u/s 80 HHC of IT Act. Therefore, the contention of the Ld. Sr. D.R. for the revenue is not tenable.” It could not be disputed that the above view flows from bare reading of the statutory provision in explanation (baa) to Section 80 2 ITA No.156 of 2008 HHC of the Act. No substantial question of law arises for consideration. The appeal is dismissed. ( ADARSH KUMAR GOEL ) JUDGE October 16, 2008 ( L. N. MITTAL ) ashwani JUDGE 3