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2016 (12) TMI 358 - RAJASTHAN HIGH COURT

2016 (12) TMI 358 - RAJASTHAN HIGH COURT - TMI - Eligibility for deduction under Section 80HHC on interest received - allowing/netting of interest paid - Held that:- As in view of clause (baa) of Section 80 HHC, the assessee is entitled to get net income under Section 80 HHC. In that view of the matter, the issues are answered in favour of the assessee and against the department. - DB Income Tax Appeal No. 329/2005 - Dated:- 23-11-2016 - K. S. Jhaveri And Mahendra Maheshwari, JJ. Mr. Siddharth R .....

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no nexus between the business income and income from the interest. Therefore, they held that interest is to be assessed under head income from the sources. The ld. CIT(A) observed at page 2 of her order that the assessee did not borrow any money for business purposes during the year under consideration and the interest outgoings relate to the borrowings made in the earlier years. The loans given during the year are out of the surplus income generated out of the export sales. There is no organize .....

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f assessee's business is not part of its business activity and therefore not eligible for deduction under Section 80HHC of the I.T. Act 1961 on such amount of interest? 2. Whether on the facts and in the circumstances of the case, the ld. Tribunal was justified in not allowing/netting of interest paid at ₹ 500396/- and is not considering only ₹ 21,179/- and in taxing the entire amount at ₹ 521574/-? 3. Whether on the facts and in the circumstances of the case, the ld. Tribu .....

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ssment order dated 27.11.1996? 5. Whether on the facts and in the circumstances of the case, the ld. Tribunal was right in observing that interest u/s.244A cannot be withdrawn but in directing to rectify under Section 154 of the I.T. Act? 4. Counsel for the appellant contended that the issues No.1 to 3 are required to be decided together in view of the provisions Section 80HHC of the Income Tax Act, in explanation (baa) which reads as under: profits of the business means the profits of the busin .....

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ed that in view of the decision of Supreme Court in case of ACG Associated Capsules (P) Ltd. vs. Commissioner of Income Tax, Central-IV, Mumbai reported in (2012) 343 ITR 89 where in respect of quantum, the Supreme Court held as under: 1. Section 80HHC of the Income Tax Act, 1961- Deduction-Exporters-Assessment year 2003-04- Whether expression included any such profit in clause (baa) to section 80HHC would mean only such receipts by way of brokerage, commission, interest, rent, charges or any ot .....

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