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2007 (9) TMI 360 - HC - Income TaxDeduction-Export- The assessee filed a return of income claiming deduction under section 80HHC of the Income- tax Act, 1961. The Assessing Officer finalised the assessment after, inter alia, deducting 90 per cent. interest received for the purpose of section 80HHC deduction. Aggrieved by the assessment order, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) on the ground that the interest earned from the sister concern is part of the appellant’s business profits and therefore the same cannot be reduced. As an alternative plea, it was contended that the interest paid to the sister concern for the loans obtained from them should be deducted from the interest received from them and only the net amount should be taken. The Commissioner of Income-tax (Appeals) dismissed the appeal on that issue. The assessee filed a further appeal before the Income-tax Appellate Tribunal. The Tribunal held that since there was bound to be an expenditure directly relatable in earning such income, only the net amount of interest should be taken. Aggrieved by the order of the Tribunal, the present appeal is filed. Held that- held that- while computing such profits and under the head ‘Profit and gain of business or profession’ if any receipt by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature is included in such profits, it has to be reduced by 90% from the profits computed. The deduction to be made are from the amount of profit so computed and not from the amount computed under any other head of income of that assessee. Once the receipt of interest is known, 90%of the same is to be reduced from the profits without deducting any amount.
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