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2015 (7) TMI 514 - HC - Income TaxDeduction u/s 80HHC on interest on intercorporate deposits - ITAT allowed claim - Held that:- The deduction allowed under Section 80HH of the Act is in the form of incentive for establishment of an industry in a backward area. The interest paid on intercorporate deposits can by no means is said to be an activity of the industry so established. When the making of intercorporate deposits itself is not part of the manufacturing activity, the question of the income derived therefrom being treated as qualified for deduction under Section 80HH of the Act, does not arise.- Decided in favour of revenue. Disallowance of lease rent - ITAT allowed claim - Held that:- Necessary facts are not placed before this Court. In case the lease is referable to, or connected with the principal activity of manufacture, the deduction can certainly be allowed. However, if the principal activity is only of manufacturing drugs, it is difficult to infer the leasing of any machinery or premises as part of that activity. At any rate, the Tribunal also did not analyse and record a finding that the leasing was part of the principal activity of the respondent. Therefore, we find that the view taken by the Tribunal cannot be sustained in law. - Decided in favour of revenue.
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