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2010 (4) TMI 751 - BOMBAY HIGH COURTBusiness income Vs. Other sources - Deduction u/s 80HHC - The activity of discounting local sale bills or of advancing loans to sister concerns was held to be only an additional activity, which commences after the activity related to the business of export has ended - Merely because an assessee carries on business and the income of the business is invested in deposits, that would not result in an inference that the return on the investments must partake of the character of business income - Where the assessee engages in an independent line of business, interest earned on deposits cannot be regarded as falling under the head of profits and gains of business or profession - Such income would fall for classification as income from other sources Regarding deduction u/s 80HHC - In the present case, the contention of the assessee both before the Assessing Officer and in appeal was that it carries on the business of the export of seeds, spices and similar goods - If the assessee has no export orders and if there is still a balance, the assessee used its funds to discount the purchase bills of private parties for short periods of time of three to five weeks - Income received by way of discounting charges and interest on intercorporate deposits would not fall under the head of profits and gains of business or profession but would fall under the head of income from other sources - Having no direct and proximate nexus with the export activity such income has to be wholly kept out of the reckoning for computing the deduction under section 80HHC - The appeal is disposed of
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