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2023 (6) TMI 1363 - ITAT DELHIDeduction u/s 80HHC - CIT(A) holding that income classified as other income, though held as “Business Income” was not to be considered for the purpose of working out deduction u/s 80HHC - HELD THAT:- If the receipt of the nature Staff quarter rent, Misc Receipts, gains in exchange, liabilities written back are chargeable as profits and gains of business and chargeable to tax u/s 28 of the Act, and if any quantum of these receipts is allowable as an expense in accordance with Sections 30 to 44D and is not to be included in the profits of the business of the assessee as computed under the head "Profits and Gains of Business or Profession", ninety per cent of such quantum of the receipt of rent or interest will not be deducted under clause (1) of Explanation (baa) to Section 80HHC. Ninety per cent of not the gross of these receipts but only the net, which has been included in the profits of business of the assessee as computed under the head "Profits and Gains of Business or Profession", is to be deducted under clause (1) of Explanation (baa) to Section 80HHC for determining the profits of the business. But no such exercise was taken up by the Ld. AO Therefore the wholesome effect of above is that Ld AO and so did the learned CIT(A) erred in law and in facts of the case in holding that income classified as other income, though held as “Business Income” was not to be considered for the purpose of working out deduction u/s 80 HHC. Ground decided in favour of the assessee. AO shall recompute the deduction u/s 80HHC, by considering these receipts without deducting 90% of these, while computing adjusted profits. Applicability of Section 80AB for not allowing deduction u/s 80HHC - Computation of deduction on the basis of ‘net income’- Directions to recompute the deduction u/s 80HHC, while giving effect to the judgment of Hon’ble Supreme court in Commissioner of Income Tax-1 versus Reliance Energy Ltd. [2021 (4) TMI 1237 - SUPREME COURT] Treatment to dividend income received - Direction for allowing the credit of taxes paid in Singapore on the dividend income as per the provisions of DTAA in accordance with law.
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