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2016 (3) TMI 681 - HC - Income TaxEntitlement for deduction under section 80HHC - Held that:- Section 80HHC allows deduction in a case where the assessee is primarily an exporter and is engaged in the business of export out of India of any goods or merchandise, and also receives foreign remittance/sale/export proceeds received in India or brought into India by the assessee in convertible foreign exchange. In our view, a deduction is allowable to an exporter of goods and none else. deduction under section 80HHC on interest income - Whether where merely because interest has been held to be business income whether deduction under Section 80HHC is allowable or not? - Held that:- Intention of the assessees is well set that it only wants to earn interest from those funds which are lying idle with it or which can be spared as surplus in the business for earning income from the said source and a businessman will not keep funds idle and certainly an endeavour of a business man primarily is to earn maximum profits, that does not mean character of income changes merely because the assessee has taken such interest in the profit and loss account and projected it as business income, it does not mean that such receipt also enures for deduction under Section 80HHC of the Act. The assessee are not engaged in the activity of advancing money as a business activity nor loans advanced constitute an incidental activity to the business of exports of the assessee. Irresistible conclusion, therefore, is that the earning of interest by an assessee on sums advanced does not come within the purview of business income, or as profits from business. - Decided against assessee
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