IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR WEDNESDAY, THE 13TH FEBRUARY 2008 / 24TH MAGHA 1929 ITA.No. 124 of 2002() --------------------- ITA.168/CO/2001 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT: RESPONDENT --------------------------- THE COMMISSIONER OF INCOME TAX, TRIVANDRUM. BY ADV. SRI.P.K.R.MENON(SR.),SR.COUNSEL FOR IT SRI.GEORGE K. GEORGE, SC FOR IT RESPONDENTS: ------------- M/S.ROYAL LINK EXPORTS, CHANDIROOR, ALAPPUZHA. BY ADV. SRI.A.KUMAR THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 13/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & T.R. RAMACHANDRAN NAIR, JJ. -------------------------------------------- I.T.A. No. 124 OF 2002 -------------------------------------------- Dated this the 13th day of February, 2008 JUDGMENT C.N. Ramachandran Nair,J. Two issues arise from the order of the Tribunal against which this Appeal is filed by the revenue. The first issue is covered in favour of the assessee vide decision of the Supreme Court in COMMISSIONER OF INCOME TAX V. BABY MARINE EXPORTS, (2007) 290 I.T.R. 323 (SC). Therefore the appeal pertaining to question Nos. 1 and 2 is dismissed. The next issue is whether the Tribunal was right in treating interest earned on fixed deposit against security of which loan was availed by the assessee for the business forms part of export profit for relief under Section 80HHC of the Act. Even though counsel for the revenue relied on Division Bench decision of this Court in K. RAVINDRANATHAN NAIR V. DEPUTY COMMISSIONER OF INCOME TAX, (2003) 262 I.T.R. 669 and that of the Supreme Court in PANDIAN CHEMICALS LTD. V. C.I.T., (2003) 262 I.T.R. 278, 2 and counsel for the assessee referred to the decision of the Madras High Court in C.OI.T. V. N.S.C. SHOES, 258 I.T.R. 749, we find that the issue is squarely covered against the assessee and in favour of the revenue by decision of this Court in K. RAVINDRANATHAN NAIR'S case, first referred above. Therefore following the said decision, we allow the departmental appeal on this issue reversing the order of the Tribunal and restoring the assessment with direction to the assessing officer to recompute the relief under Section 80HHC after excluding interest income earned on fixed deposit. (C.N.RAMACHANDRAN NAIR) Judge. (T.R.RAMACHANDRAN NAIR) Judge. kk 3 4