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2015 (4) TMI 804 - HC - Income TaxTreatment of other income while calculating deduction u/s 80HHC of Income Tax Act, 1961 - Netting off of interest income against interest expenditure under deduction u/s 80HHC - Held that:- The said issues are squarely covered by the decision of the Hon'ble Supreme Court in the case of ACG Associated Capsules (P.) Ltd.[2012 (2) TMI 101 - SUPREME COURT OF INDIA]. It is held by the Hon'ble Supreme Court in this decision that 90% of not the gross interest but only the net interest, which has been included in the profits of the business of the assessee as computed under the heads "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 business. Applying the law laid down by the Hon'ble Supreme Court in the case of ACG Associated Capsules (P.) Ltd. the aforesaid questions are held in favour of the assessee and order passed by the ITAT in ITA No.2053/Ahd/2004 for AY 1997-98 is hereby quashed and set aside. Now, the AO to recompute the deduction under Section 80HHC of the Income-tax Act considering the law laid down by the Hon'ble Supreme Court in the case of ACG Associated Capsules (P.) Ltd. [2012 (2) TMI 101 - SUPREME COURT OF INDIA]. - Decided in favour of assessee.
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