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2010 (12) TMI 126 - HC - Income TaxSubstantial question of Law - Whether the Income-Tax Appellate Tribunal was justified in law in holding that the interest on a fixed deposits in banks and another interest were not eligible for deduction under Section 80 HHD of the Income-Tax Act, 1961 - The expression "derived from" has come up for interpretation in the case of Commissioner of Income Tax Vs. Sterling Foods, Banglore, (1999 -TMI - 5740 - SUPREME Court) The interest income is not derived from the foreign tourists. It is the deposit which is made of the advances received from those foreign tourists which is kept in the bank account and interest is received there from. Such an interest cannot be treated to be derived from the services provided to the foreign tourists. This interest income is not the result of services provided to those foreign tourists. Rather, further income is earned from the income generated from the services provided to those foreign tourists which source obviously becomes beyond the first degree. There is another difficulty in the way of the assessee. Such profit derived from "services provided to foreign tourists" should be in convertible foreign exchange income in question is received from banks in India in Indian currency and not in foreign exchange. By no stretch of imagination, the assessee can take benefit thereof for the purpose of Section 80HHD of the Act. - Thus these appeals are dismissed in favour of Revenue and against the assessee
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