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TMI Blog2017 (5) TMI 1587X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal whereby the Tribunal has dismissed the appeal approving the view taken by the AO as well as CIT(A). 2. This Court while admitting the matter framed the following substantial question of law:- In DBITA No.227/2009 "1. On the facts and circumstances of the case and in law whether the interest receipt of Rs. 14,14,576/- not constitute "business income" for the purpose of computation of exemption u/s 10B of the Act? 2. When the interest income is being considered as "income from other sources" u/s 56 of the Act, whether the corresponding interest expenditure incurred wholly and exclusively for generating such interest income can be disallowed despite specific provisions u/s 57(iii) of the Act?" In DBITA No. 215/2011 1. On th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income and after deducting such expenses, the total of the net receipts are profits of the business of the Assessee computed under the head "Profits and Gains of Business or Profession" from which deductions are to made under Clauses (1) and (2) of Explanation (baa). 10. Under Clause (1) of Explanation (baa), ninety per cent of any receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature included in any such profits are to be deducted from the profits of the business as computed under the head "Profits and Gains of Business or Profession". The expression "included any such profits" in Clause (1) of the Explanation (baa) would mean only such receipts by way of brokerage, commission, inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Section, be allowed, in computing the total income of the Assessee, a deduction from such income by way of dividends an amount equal to" a certain percentage of the income mentioned in this Section. The Constitution Bench held that the Court must construe Section 80M on its own language and arrive at its true interpretation according to the plain natural meaning of the words used by the legislature and so construed the words "such income by way of dividends" in Sub-section (1) of Section 80M must be referable not only to the category of income included in the gross total income but also to the quantum of the income so included. Similarly, Explanation (baa) has to be construed on its own language and as per the plain natural meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luded from the profits of the business. In our considered opinion, it was not necessary to refer to the explanatory Memorandum when the language of Explanation (baa) to Section 80HHC was clear that only ninety per cent of receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature included in such profits computed under the head profits and gains of business of an Assessee could be deducted under Clause (1) of Explanation (baa) and not ninety per cent of the quantum of any of the aforesaid receipts which are allowed as expenses and therefore not included in the profits of business of the assessee. 4. The issue is required to be answered in favour of the assessee against the department. The ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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