TaxTMI 
TaxTMI 
2018 (9) TMI 1632
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....i. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the appellant is not entitled to deduction under Section 80HHC of the Income Tax Act, in respect of the interest and rent earned out of business operations ? ii. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that 90% of the gross receipts should be excluded from the profits of the business under Clause (baa) of Explanation to Section 80HHC of the Act? And iii. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the appellant is not entitled to deduction under Section 40(a)(iia) read with the Explanation thereto, in respect....
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....t the appellant is not entitled to deduction under Section 80HHC of the Income Tax Act, in respect of the interest and rent earned out of business operations ? and ii. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that 90% of the gross receipts should be excluded from the profits of the business under Clause (baa) of Explanation to Section 80HHC of the Act" 7. The above referred to two questions have been answered in the said judgment dated 03.4.2018 in TCA.No.851 of 2008. For better appreciation, the relevant portions of the said judgment dated 03.4.2018 are extracted as hereunder : "3. This Tax Case Appeal has been admitted on the following substantial questions of law:-....
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....account. All four variables were required to be given weightage. The substitution of Section 80HHC(3) secures profits derived from the exports of eligible goods. Therefore, if all the four variables are kept in mind, it becomes clear that every receipt is not income and every income would not necessarily include element of export turnover. This aspect needs to be kept in mind while interpreting Cl. (baa) to the said Explanation. The said clause stated that 90 per cent of incentive profits or receipts by way of brokerage, commission, interest, rent charges or any other receipt of like nature included in business profits, had to be deducted from business profits computed in terms of Sections 28 to 44D of the IT Act. In other words, rece....
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....n terms of Cl. (baa), 90 per cent of the 'independent income' had to be deducted from gross total income to arrive at business profits to which the fraction had to be applied. Since, the processing charges constituted independent income similar to rent, commission, etc., which formed part of the gross total income, the same had to be reduced by 90 per cent as contemplated in Cl. (baa) to arrive at business profits. Therefore, the said processing charges were includible in the total turnover in the formula under section 80HHC(3) of the IT Act. 23. Before concluding we state that the nature of every receipt needs to be ascertained in order to find out whether the said receipt forms part of/or that it has an attribute of an ex....