(a) Interest received of Rs. 19,79,277 without netting of the same against the interest paid amounting to Rs.4,06,17,5821- ; and

(b) Duly entitlement pass book receipts of Rs.4,93,68,1361-.

2. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of Jt. Commissioner of Income Tax I AO/TPO in making adjustment by applying CUP method in case of exports of manufactured goods on account of following:

(i) Applied Comparable Uncontrolled Price ("CUP") method selectively for certain international transactions of exports, without rejecting Transactional Net Margin Method ("TNMM") method.

(ii) Confirmed the order passed by the TPOIAO without appreciating that none of the conditions set out in section 92C (3) of the Act are satisfied in the case.

(iii) Not appreciated the fact that geographical difference causes significant variation in the pricing of International transaction.

(iv) Ignored the differences in sales volume while applying the CUP method and restricted the volume discount to 5%.

The appellants crave leave to add, to amend or alter the foregoing grounds of appeal or to take an additional ground if need be.'

Grounds of appeal in ITA No.2328/Mum/201 1(Revenue's appeal):

"1. Whether on the facts and circumstances of the case and in law, the CIT(A) erred in restricting the disallowance of interest expenses of Rs. 12,17,900 / - to the dividend income and thereby disallowing the same in computing the business income and considering attributable to 'income from other sources' and limiting deduction u/ s.80M by the said amount.

2. Whether on the facts and circumstances of the case and in law, the CIT(A) erred in applying CUP method instead of transaction net margin method (TNMM).

3. The appellant craves leave to add to, amend or withdraw the aforesaid grounds of appeal."

2. Before proceeding to adjudicate these appeals we may mention here that earlier these appeals were adjourned vide order sheet entry dated 1/7/2013 on the request of assessee's counsel vide letter dated 28/6/2013, as according to that letter one of the issues raised in the present appeal is referred to Special Bench in ITA No.5924/D/2012 and thereafter the present case was fixed on 25/11/2013. It was further informed by both the parties that the said Special Bench has been withdrawn and, therefore, this matter can be proceeded with. Ld. CIT-DR has submitted a letter stating that the said Special Bench has been withdrawn. Accordingly, we proceed to decide the present cross appeals.

2.1 Referring to ground No.1 of assessee's appeal, it was the case of Ld. AR that both the issues raised by the assessee are now covered by the decisions of Hon'ble Supreme Court and since the benefit of these decisions were not available to Ld. CIT(A) when the appeal of the assessee was decided, the matter may be sent back to the file of AO for recalculation of deduction under section 80 HHC of the Income Tax Act,1961 (the Act) on both these issues as per the following decisions of Hon'ble Supreme Court on these issues.

3. So far as it relates to first issue raised in first ground of assessee's appeal it relates to netting of the interest income. This issue was stated to be covered by the decision of Hon'ble Supreme Court in the case of ACG Associated Capsules