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2022 (2) TMI 1033 - HC - Income TaxDeduction u/s 80HHC - Income earned from hiring plant and machinery - Whether the income earned by the Appellant from leasing its plant and machinery in course of its business activity of leasing is in the nature of rent as contemplated under Explanation (baa) to Section 80 HHC of the Act? - Whether income earned by leasing plant and machinery is synonymous to the words “rent” or “charges” as contemplated in Explanation (baa) to Section 80 HHC? - HELD THAT:- In Sesa Goa Ltd [2015 (5) TMI 621 - BOMBAY HIGH COURT] this Court had considered that receipts from hiring barges would be in the nature of rent or similar to rent and, therefore, would fall in items specified in clause (baa) of Explanation to section 80HHC. It has been observed, the assessee has not been able to show that such an activity had any nexus to the export activity and, thus, the decision in Ravindranathan Nair's case [2007 (11) TMI 10 - SUPREME COURT] had been followed. In the present matter as well, the assessee is not at loggerheads with the revenue that the amount sought to be deducted from the profits of business, under section 80HHC is not an income earned from export. It is the income earned by hiring plant and machinery. The situation thus as has been observed by the authorities hitherto is squarely covered by the decisions in Ravindranathan Nair's case and Sesa Goa (supra). There is no point in remitting the matter to the authorities. The income earned from hiring out plant and machinery would have to be deducted pursuant to Explanation (baa) to Section 80 HHC. Having regard to emerging position, what has been disallowed pursuant to Explanation (baa) to Section 80HHC is the income from hiring out plant and machinery which is independent of exports. The substantial questions of law as answered in the affirmative.
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