2012 (10) TMI 1230

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....0-12-2007, Annexure A.4 passed by the Income Tax Appellate Tribunal, New Delhi Bench 'E' passed in Miscellaneous Application No.14/DEL/06 (ITA No.3048/DEL/2003) for the assessment year 1993-94, claiming following substantial question of law:- "Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in dismissing the misc. application of the revenue, on the issue of netting of interest, by the assessee, for claiming deduction under Section 80HHC, inspite of the direct decision of the Hon'ble Punjab and Haryana High Court, in the case of Rani Paliwal v. CIT 268 ITR 220?" 3. Briefly, the facts as narrated in ITA No.74 of 2009 may be noticed. The assessee is a private limited comp....

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....nsel for the parties and perused the record. 5. The issue involved herein is whether it is the net interest which has to be taken into account while computing deduction under Section 80HHC of the Act as per Explanation (baa) to Section 80HHC(4C) of the Act. The Hon'ble Supreme Court in ACG Associated Capsules (P.) Ltd. v. CIT [2012] 343 ITR 89/205 Taxman 136 (Mag.)/18 taxmann.com 137 held as under:- "26....that ninety per cent of not the gross interest but only the net interest, which has been included in the profits of the business of the assessee as computed under the head 'Profits and Gains of Business or Profession' is to be deducted under clause (1) of Explanation (baa) to Section 80HHC for determining the profi....