2006 (10) TMI 113

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....me-tax Act (for short, "the Act") by holding that interest cannot be treated as business income. Similarly, for the assessment year 1989-90, he denied the benefit of section 80HHC in so far as the interest income is concerned. Aggrieved by the same, the assessee filed two appeals. The appellate authority passed a common order. The appellate authority accepted the contention of the assessee with regard to interest income, job work tailoring and nomination profits for the purpose of benefit under section 80HHC of the Act. The Revenue moved the Tribunal. The appeal of the Revenue was accepted. It is in these circumstances, the appellant-assessee is before us. The assessee has raised the following two questions of law for our consideration: ....

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.... the arguments placed before us. Section 80HHC is a special provision providing deduction in all export business. Section 80HHC(1) would read as under: "80HHC. (1) Where an assessee, being an Indian company or a person (other than a company) resident in India, is engaged in the business of export out of India of any goods or merchandise to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of the profits derived by the assessee from the export of such goods or merchandise:..." Section 80HHC(3) would read as under: "80HHC. (3) For the purposes of sub-section (1), (a) where the export out of India is of....

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....ould fit into section 80HHC(3) of the Act for the purpose of quantification of relief. The assessing authority has negatived the contention in terms of his order. The Appellate Commissioner has chosen to accept the same. The Tribunal has chosen to reject the same. The Tribunal in the impugned order, notices section 80HHC and thereafter the Tribunal would hold that unless there is a relationship of interest income to the export business, the appellant is not entitled for deduction under section 80HHC of the Act. This principle of law cannot be doubted. The material facts would show that interest in terms of the material on record was obtained out of temporary deposit made by the assessee in the bank in terms of the order of the assessing aut....