TaxTMI 
TaxTMI 
2000 (7) TMI 42
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Department was allowed in the following terms. "This appeal concerns the assessment year 1989-90. The Income-tax Appellate Tribunal has held that interest income is business income. In view of the judgment of this court in Godavari Sugar Mills Ltd. (No. 2) v. CIT [1991] 191 ITR 359, such income cannot be business income. It is income from other sources. Therefore, it will not form part of prof....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1992, distortion arose in determining export profits. The assessee used to inflate the business profits in the above formula by including receipts which had no relation with export activities. In cases of composite business, even where the component of local sales far exceeded sale proceeds from export activity, receipts like rent, interest, labour commission were included in business profits in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the head "Profits and gains of business" which, in turn, refers to section 28 to section 44D of the Income-tax Act. In the case of CIT v. K. K. Doshi and Co. [2000] 245 ITR 849 (Bom)(ITA No. 77 of 2000), this court has once again reiterated that even before April 1, 1992, receipts which did not have nexus with the export activity cannot be included in business profits. In the present matter, we ma....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s, such income cannot fall under the head "Profits and gains of business". Hence, such income cannot be included in business profits in the above formula. Therefore, on both counts, the appeal stands allowed. Even if it is held that interest income was a business income, the same was not includible in business profits in the above formula. On the other hand, as stated above, the Assessing Officer ....