INCOME TAX ACT, 1961

Section 80HHC

Deduction under section 80HHC - Computation - Lease money and interest income -

Assessee was trader and dealing in export of cycle parts. AO held that income earned from leasing and interest on loans and advances given to sister concerns were considered as income under the head 'income from other sources'. Assessee conceded that lease income and interest income from loans and advances to sister concerns would come in domain of 'income from other sources'. However, it was argued that assessee had paid interest on certain loans availed, hence there should be setting off/adjustment of interest received and paid, it was thereafter that net amount be considered for deduction under section 80HHC. Held: Interest paid by assessee was directly linked with business and would be dealt with while calculating income from business or profession. The lease money and interest income was not income from business, rather it was income from application of money which might have been earned from business or profession. Expression “included in such profits” in Clause (1) of Explanation (baa) would include receipts by way of brokerage, commission, interest, rent, charges or any other receipt which are included in profits of business as computed under the head “profits and gains of business or profession”. Interest received and lease money was not even includable in the profits and gains determined under the head “profits and gains of business or profession

Relied:M/s ACG Associated Capsules Pvt. Ltd. (Formerly M/s Associated Capsules Pvt. Ltd.) & Ors. v. CIT & Ors. (2013) 343 ITR 89 (SC) : 2012 TaxPub(DT) 0651 (SC)

REFERRED : M/s ACG Associated Capsules Pvt. Ltd. (Formerly M/s Associated Capsules Pvt. Ltd.) & Ors. v. CIT & Ors. (2013) 343 ITR 89 (SC) : 2012 TaxPub(DT) 0651 (SC)

FAVOUR : Against the assessee

A.Y. :

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