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2016 (8) TMI 1380 - MADRAS HIGH COURTComputation of deduction u/s 80HHC - interest from fixed deposits formed out of compulsory retention and transfer of export realisation is income from business liable for inclusion as business profit - Held that:- Referring to Section 80HHC learned standing counsel for the Income Tax Department submitted that if the Company is engaged in the business of export, income earned out of exports of any goods or merchandise, deduction to the extent of profits, referred to in sub-Section (1B) alone would be allowed, if only the income is derived by the assessee, from the export of such goods or merchandise, and not from any other source. Further on the facts and circumstances of the case, interest income has been derived, not from the export of goods or merchandise, but derived from the deposits made by the appellant and therefore, interest income, earned by the assessee, cannot be treated as "business income", liable for deduction. Interest income earned from the deposits, should be treated only as "other source" and therefore, both the appellate authority, as well as the Tribunal, have rightly decided the issue, in favour of the Revenue. Legislature has engrafted the provisions, as to how, the Company engaged in the business of export, out of India, of any goods or merchandise, can be allowed, to compute the total income of the assessee, deduction to the extent of profits, referred to, in sub-Section (1B), derived by the assessee, from such export of goods or merchandise, meaning thereby, that such income from the said proceeds of the goods or merchandise, should be earned in convertible foreign exchange or in otherwords, and not income generated within the country, from other sources. - Decided in favour of revenue.
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