TMI Blog2010 (12) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... he business of the assessee. - Held that: - authorities below have held that the income from the interest received by the Respondent is a part of the business profit and as such in view of the said judgment in the case of Alfa Laval India Ltd. (2007 -TMI - 32446 - SUPREME Court), the same cannot be excluded from the business profit while calculating the deduction under Section 80HHC of the said Act. - 20 OF 2003 - - - Dated:- 23-12-2010 - S. B. DESHMUKH, F. M. REIS, JJ Ms. Asha Dessai, Advocate for the Appellant. Mr. Nishant Thakkar with Ms. A. Pereira, Advocates for the Respondent. JUDGMENT ( Per F. M. REIS, J) The above Appeal challenges the judgment and order dated 30th December, 2002 passed by the learned Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, the ITAT dismissed the Department's Appeal holding that the interest income earned by the Assessee is earned from the business activity and hence income earned thereof is to be taxed as business income. The ITAT further held that for the reasons recorded in the Revenue Appeal for the Assessment Year 1992-1993 that the amount in the nature referred to in Explanation (baa) of Section 80HHC should have been excluded. The Appeal filed by the Appellant came to be dismissed. The above Appeal challenging the order passed by the ITAT came to be admitted on the following substantial question of law : (A) Whether on the facts and circumstances of the case the interest of Rs.9,92,199/- received from Bank and interest of Rs.90,31,279/- received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the present case. He further submitted that there was a finding of the fact therein to the effect that the assessee therein had no evidence to show that the monies on which the interest was earned were advanced in the course of the assessee's business. On the other hand, it was his contention that in the present case the findings of the fact is that though the main object of the Respondent is to extract iron ore and export the same, the assessee's company is not barred from carrying on activity like the present one. It has been further held therein that in such a situation it cannot be said that the assessee has not carried out the business of placing various deposits and earning interest from the same activity in the course of the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd or that the same are in any way perverse. The Apex Court in the judgment reported in (2005) 2 SCC 324 in the case of M. Janardhana Rao V/s Joint Commissioner of Income Tax has held at para 10 thus : 10. Some of the provisions of Section 260-A are in pari materia with various sub-sections of Section 100 CPC. The provisions are Sections 260-A(1), 260-A(2)(c), 260-A(3), 260-A(4) of the Act corresponding to Sections 100(1), 100(3), 100(4) and 100(5) CPC . 7. Hence, the question of fact arrived at by the authorities below cannot be interfered with in the present appeal under Section 260-A of the said Act as no perversity has been shown by the Appellant to the said findings. 8. The judgment of this Court in the case of Ravi Ratna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue on the other hand submitted that the income shown under the caption 'other income' had no nexus with the business of the assessee. He submitted that there is nothing on record to show that the income from portfolio management shown under caption 'other income' was related to the business of the assessee. He relied upon the decisions of this Court in the case of Sudarshan Chemicals (supra), S.G. Jhaveri Consultancy Ltd. (supra) and the decision of this Court in the case of (C.I.T. v. K.K. Doshi Co.)6, reported in 245 I.T.R. 849 (Bom.) and submitted that the amounts in question were not part of the operational income and hence not includible for computing deduction under section 80-HHC of the I.T. Act. 17. In our opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be deducted from the business profits while computing the deduction under section 80-HHC of the I.T. Act. The decisions relied upon by the Tribunal have been distinguished in the case of Bangalore Clothing Co. (supra). In the case of Bangalore Clothing Co. (supra), it is held that the A.O. must ascertain the nature of receipt in each case independently. Interest income may or may not be out of business activity. If it is not part of operational business income, then, the A.O. would have been justified in excluding the same for the purpose of deduction under section 80-HHC of the Act. However, in the present case, the A.O. has accepted that the interest income received from customers as well as sales tax set off are assessable und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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