Judgment in TCA No.1209/2009 dated 24.01.2020 (M/s.Wheels India Limited Vs. Asst Commissioner of Income Tax, Chennai) 1/6 IN HIGH COURT OF JUDICATURE AT MADRAS DATED: 24.01.2020 CORAM HON'BLE DR.JUSTICE VINEET KOTHARI AND HON'BLE MR.JUSTICE R.SURESH KUMAR Tax Case Appeal No.1209 of 2009 M/s.Wheels India Limited, Padi, Chennai - 600 050. Appellant Vs. Asst. Commissioner of Income Tax, Company Circle - III (3), Chennai - 600 034. Respondent Appeal filed under Section 260A of Income Tax Act, 1961 against order of Income Tax Appellate Tribunal Madras 'D' Bench, Chennai dated 30th January 2009 in ITA.No.438/Mds/2008. For Appellant : Mr.Venkat Narayanan For Subbaraya Aiyar Padmanabhan For Respondent : Mrs.R.Hemalatha Senior Standing Counsel http://www.judis.nic.in Judgment in TCA No.1209/2009 dated 24.01.2020 (M/s.Wheels India Limited Vs. Asst Commissioner of Income Tax, Chennai) 2/6 JUDGMENT (Judgment of Court was delivered by DR.VINEET KOTHARI, J.) This Tax Case Appeal has been filed by Assessee against order of learned Tribunal dated 30th January 2009 for Assessment year 2004-05. present appeal has been admitted by Coordinate Bench of this Court only on following limited question of law: "Whether on facts and in circumstances of case, Tribunal was right in holding that 90% of gain on derivative products and gain on interest rate swap on derivative instruments should be excluded from profits of business for purpose of computation of deduction u/s.80HHC of Act?" 2.Para 5.2 of impugned order of learned Tribunal is quoted below for ready reference: "5.2 After hearing both parties and considering relevant record, we note that first three items i.e. sub- contract charges receipts; gain on derivative products and gain on interest swap on derivative instruments are covered against assessee by decision of Hon'ble Supreme Court in case of CIT vs. K.Ravindranathan Nair (295 ITR 228). Accordingly we uphold order of Commissioner (A) qua these three items. As far as issue regards DEPB income is concerned, we note that this issue is pending adjudication before Special Bench of this Tribunal. Accordingly we set aside order of lower authorities and remit http://www.judis.nic.in Judgment in TCA No.1209/2009 dated 24.01.2020 (M/s.Wheels India Limited Vs. Asst Commissioner of Income Tax, Chennai) 3/6 same to record of Assessing Officer to pass fresh order as per outcome of Special Bench decision or latest judgment of High Courts/Supreme Court. Needless to say assessee be given opportunity of hearing before passing such order." 3.The learned counsel for Appellant/Assessee Mr.Venkat Narayanan submitted that Assessee did not earn any income on gain on derivative products and gain on interest swap on derivative instruments, as discussed by learned Tribunal in aforesaid para 5.2, but on account of changing one type of loan taken by Assessee from foreign currency fixed interest loan to foreign currency floating interest rate, Assessee's interest liability had gone down approximately by Rs.38 lakhs in impugned assessment year in question and therefore, provisions of Clause (baa) and Explanation to Section 80 HHC of Income Tax Act, 1961 could not be applied to said interest component by learned Tribunal by misapplying judgment of Hon'ble Supreme Court in case of Commissioner of Income Tax vs. Ravindranthan Nair [92007) 295 ITR 228]. Hon'ble Supreme Court, in aforesaid Judgment, in para 23 has held as under: "23. Before concluding we state that nature of every receipt needs to be ascertained in order to find out http://www.judis.nic.in Judgment in TCA No.1209/2009 dated 24.01.2020 (M/s.Wheels India Limited Vs. Asst Commissioner of Income Tax, Chennai) 4/6 whether said receipt forms part of/or that it has attribute of export turnover. When indirect tax is collected by taxpayer on behalf of government tax recovered is for government. It may be income in conceptual sense or even under I.T. Act but while working out formula under Section 80HHC(3) of I.T. Act and while applying four variables one has to ascertain whether receipt has attribute of export turnover. indirect tax like excise duty does not have that element of export turnover as understood in above formula. As stated above, it is recovered by taxpayer on behalf of government. Therefore, in present cases, our judgment in Commissioner of Income Tax, Coimbatore v. M/s. Lakshmi Machine Works (supra), has no application." 4.The learned counsel for Respondent/Revenue supported impugned order of learned Tribunal. 5.Having heard learned counsel for parties, we are of opinion that contention sought to be raised by Assessee before this Court now does not appear to have been raised before learned Tribunal in manner it has been raised before this Court and facts and details of reduction of interest liability on account of change of contract with lending financial institutions from "Foreign currency Fixed Interest Loan" to "Foreign currency Floating Interest rate" has not been discussed by learned Tribunal in impugned order. http://www.judis.nic.in Judgment in TCA No.1209/2009 dated 24.01.2020 (M/s.Wheels India Limited Vs. Asst Commissioner of Income Tax, Chennai) 5/6 6.The Tribunal, being final fact finding body, has to be recorded its independent findings facts and then only apply law applicable to such facts. We do not find any such discussion on this aspect of matter by learned Tribunal. 7.Therefore, we are inclined to remand matter back to learned Tribunal without answering aforesaid question of law, as quoted above. 8.Accordingly, we dispose of present Appeal and we remit back matter to learned Tribunal for deciding appeal on said aspect of matter again, after hearing contentions of both parties in accordance with law. No costs. (V.K.J.) (R.S.K.J.) 24.01.2020 Sgl To Income Tax Appellate Tribunal, 'D' Bench, Chennai. http://www.judis.nic.in Judgment in TCA No.1209/2009 dated 24.01.2020 (M/s.Wheels India Limited Vs. Asst Commissioner of Income Tax, Chennai) 6/6 DR.VINEET KOTHARI, J. And R. SURESH KUMAR, J. Wheels India Limited v. Asst. Commissioner of Income-tax, Company Circle - III(3), Chennai