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2011 (11) TMI 485 - HC - Income TaxDeduction u/s 80HHC - rent and interest received from parking of surplus funds, bonds etc. - Held that:- It is not material and relevant whether the factory building was a business asset or there was no intention to part or sell the same. Rent received is specifically taxable under the head 'income from house property'. Where surplus funds are parked with the bank and interest is earned thereon it can only be categorized as income from other sources. To give effect to this position, the Assessing Officer while computing profits of the export business will have to remove from the debit side of the profit and loss account the corresponding interest expenditure that has been "laid out" to earn such income from other sources. Further, interest earned on fixed deposits for the purposes of availing of credit facilities from the bank, does not have an immediate nexus with the export business and therefore has to necessarily be treated as income from other sources and not business income - This receipt merits separate treatment under section 56 which is outside the ring of profit and gains from business and profession. It goes entirely out of the reckoning for the purposes of section 80HHC - Decided in favour of the Revenue.
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