1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.2177 OF 2009 The Commissioner of Income Tax – 8, Mumbai ..Appellant. Versus F.D.C. Limited, Mumbai – 400 102 ..Respondent. Mr.Suresh Kumar for the appellant. None for the respondent. CORAM : Dr.D.Y. Chandrachud & J.P. Devadhar, JJ. DATE : 5 May 2010. P.C. : 1. None for the respondent, though served. 2. The appeal has been admitted on the following substantial questions of law : (a) Whether on the facts and in the circumstances of the case the Tribunal is correct in law in remitting back the issue to the A.O. for verification and to exclude 90% of the net interest in case the assessee is able to establish the nexus between the interest received and the interest payments without appreciating the fact that the netting of interest is not permissible u/s. 80HHC ? (b) Whether on the facts and in the circumstances of the case the Tribunal is correct in law in holding that the refund of sales tax 2 has to be treated as eligible for forming part of the profits of business for the purpose of deduction u/s.80HHC ? (c) Whether on the facts and in the circumstances of the case the Tribunal is correct in law in holding that sale of scrap can be part of the export activity and whether 90% of such receipts are liable to be excluded for 80 HHC deduction ? 3. In so far as question (a) is concerned, since an order of remand has been passed by the Tribunal to the Assessing Officer, we clarify and direct that upon remand the Assessing Officer shall arrive at his determination in accordance with law after taking due note of the relevant judgments including the judgment of this Court in Commissioner of Income Tax V/s. Asian Star Company Limited (Income Tax Appeal No.200 of 2009) decided on March 18/19, 2010. 4. In so far as questions (b) and (c) are concerned, the same are covered in favour of the Revenue and against the assessee in view of the judgment of this Court in Commissioner of Income Tax V/s. M/s. Dresser Rand India Private Limited (Income Tax Appeal No.2186 of 2009) decided on 8 April 2010 and are answered accordingly. 5. The appeal is accordingly disposed of. There shall be no order as to costs. (J.P. Devadhar, J.) (Dr.D.Y. Chandrachud, J.)