TaxTMI 
TaxTMI 
2007 (5) TMI 174
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....ances of the case, the Hon'ble ITAT was right in law in directing not to reduce 10% of the interest income from the profit of business for the purpose of computation of deduction under Section 80HHC of the I.T. Act." 2. Briefly the facts are that the assessee in the present case is engaged in the business of manufacture of cotton, acrylic yarn and textile in hosiery. The return for the assessment year in question was filed on December 2, 1996 declaring its income at Rs. 16,00,37,520/-. The same was processed under Section 143(1)(a) of the Income Tax Act, 1961 (for short 'the Act') on March 19, 1997 accepting the returned income of the assessee. Thereafter, the case was taken up for scrutiny and proceedings under Section 143(2) of the Act w....
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....ction 80HHC. Directions be given to assess the interest of Rs. 6,37,40,902/- under the head "business income" and recomputed deduction under section 80HHC of IT Act. Without prejudice & in alternative, ld. CIT(A) (C) erred in law and on facts in not giving directions that if interest income is assessed under the head ; Other Sources' then interest paid Rs. 54,21,210/- may be allowed as expenditure to earn interest of Rs. 6,37,40,902/- and resulting thereby business income be enhanced by Rs. 54,21,210/-." 4. The issue was dealt with by the Tribunal in para 4.5 of the order of the Tribunal in the following terms : "4.5 We have considered the submissions of both the parties carefully and gone through the material available on record. ....
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.... allow the claim by considering the aforesaid order of the Tribunal dated 23.4.04 for the assessment year 92-93 in assessee's own case." 6. From perusal of the order passed by the Tribunal, it is evident that the assessee did not raise any argument with regard to treating of income from interest, under the head 'Income from Business and Profession' as against the treatment thereof under the head 'Income from Other Sources' at the time of passing of assessment order, which was confirmed by the CIT (A) in appeal. All what he said was that the deduction therefrom should be only to the extent of 90%. In other words 10% of the interest is not to be excluded from the profits. The question as to whether the income on account of interest being not....
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....ealt with as income from business or profession, was in fact assessed as income from other sources, which order was upheld in appeal by the CIT(A). Even though, in the ground, the assessee had raised the issue for consideration of the interest income as part of the profits of business but the issue was never argued. 8. Once the conceded position on record is that the interest income earned by the assessee does not form part of income from business or profession, as computed at the time of assessment, there arises no question of deduction of 90% thereof for the purpose of calculation of deductions under Section 80HHC of the Act. The question of deduction of 90% of the income in terms of the clause (baa) of the Act would arise only if the sa....
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....Ltd.'s case [2008] 296 ITR 393 (P&H), is extracted below:- "Once at the time of passing of the assessment order in computing the income from business or profession, the amount of receipt of interest, as mentioned above, has been shown and assessed as income from business or profession, there is no reason for reducing the same out of the income from business or profession for the purpose of calculation of deduction under Section 80HHC of the Act, as after including the same in the income from business or profession, the reduction, as envisaged under that provision, would be carried out. This is clear even from what the Tribunal has directed. Accordingly, we do not find any merit in this contention of the Revenue and hold that once the incom....