2012 (9) TMI 17

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.... the facts and in the circumstances of the case, the I.T.A.T was right in law in holding that section 80-HHC(3)(b) would be applicable even where assessee's local business consists of dealing in goods different from the ones exported. 2. Whether the ITAT was right in law in holding that section 80 AB is not relevant for the purpose of computing deduction u/s 80-HHC. 3. Whether the ITAT was right in law in holding that interest earned by assessee was in the nature of business income. 4. Whether the ITAT was right in law in holding domestic business need not have any nexus with the export business for the purpose of deduction u/s 80-HHC.   5. Whether ITAT was right in law in holding that for deduction u/s 80-HHC, the domestic....

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....atory, those profits cannot be excluded while applying the formula. The Assessing Officer did not accept the assessee's contention and re-worked the deduction at Rs.15,97,672/- in the following manner : "Net Profit Rs.38,71,008/- Less : Interest Rs.22,41,296/- Rent Rs. 35,640/- Rs.22,76,936/- Rs.15,94, 072/- Add: Expenses related To interest & Rent. Rs. 3,600/- Rs.15,97,672/- 3. It may be noticed that the Assessing Officer excluded both the interest and rent receipts from the computation of the profits of the business for the purpose of calculating the deduction under Section 80HHC, but in this reference we are concerned only with the interest receipts. So far as the rent is concerned, even before the tax authorities the assessee does no....

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....ty of the transactions of advancing the monies, the activity constituted money lending business and the interest therefrom was assessable as profits of the business. It further noted that in the case of International Research Park Laboratories Ltd. (supra) it was held that a statutory formula having been prescribed, it is not permissible to exclude the domestic profits from the profits of the business in order to arrive at the export profits and that even if the domestic business (the money lending activity in the present case) was not capable of having any "turnover", the deduction under Section 80HHC cannot be denied and it had to be computed proportionately from the formula prescribed by the sub-section. 5. It is from the aforesaid or....