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2014 (11) TMI 770 - AT - Income TaxReduction of 90% of interest under Explanation (baa) to Section 80HHC - Netting off of interest expenses have nexus between interest income or not – Held that:- The word is receipt and not income accordingly while computing deduction u/s 80HHC 90% of gross receipt is to be reduced and not net of interest - stand of assessee has been that interest was earned on over due collection of sales bills, margin money deposits with the Bank and turnover tax refund from State Government etc. and these have direct business connection and were necessitated by primary business needs and do not represent any investment of surplus funds – the AO is directed to reduce 90% of the interest by netting of interest expenses having nexus with interest income – the order of the CIT(A) for reducing 90% of the interest by netting of interest expenses having nexus with interest income as held in ACG Associated Capsules (P) Ltd. v. CIT [2012 (2) TMI 101 - SUPREME COURT OF INDIA] - Decided against revenue. Deduction u/s 80HHC – Computation of export of trading goods - Held that:- CIT(A) rightly observed that apart from expenses of ₹ 1,10,79,522/-, auditor’s expenses of ₹ 17,27,437/- need to be allocated proportionately which makes total income of ₹ 1,28,06,959/- for allocation - thus, the AO was rightly directed to rework the indirect expenses for export of trading goods – Decided against revenue.
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