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2016 (11) TMI 746 - AT - Income TaxInterest received on fixed deposit - whether was part of business income and therefore should have been considered for deduction under section 80HHC? - whether the interest earned by the assessee on fixed deposit with Vijay Bank is part of business profit or to be assessed under the head ‘income from other sources’ - netting of interest receipt against the interest expenses - Held that:- We find that the fixed deposits have been made as a precondition for credit limit and which was required for earning in the business of export and, therefore, receipts of interest has direct nexus with the export business of the assessee and inextricably linked with the export business and it was not a case of parking of funds simpliciter, thus, we hold that the interest income earned from the fixed deposit was a part of business profit and netting of interest expenses against the interest income earned from the FDR is accordingly allowed while computing deduction under section 80HHC of the Act. - Decided in favour of assessee
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