Export profits: Deduction u/s.80HHC of Incometax Act: A.Y. 1992-93: Interest income assessed as business income: Such income could not be excluded from business profit while calculating deduction u/s.80HHC.

For the A.Y. 1992-93, the assessee-company had declared the interest income as business income. The Assessing Officer assessed the interest income as income from other sources. Accordingly, he excluded the interest income from the business profit while calculating deduction u/s.80HHC of the Income-tax Act, 1961. The Commissioner (Appeals) and the Tribunal allowed the assessee’s claim.

On appeal by the Revenue, the Bombay High Court upheld the decision of the Tribunal and held as under:

(i) The Commissioner (Appeals) had held that though the main object of the assesseecompany was to extract iron ore and export the same, yet it was not barred from carrying on activity like the instant one, i.e., business of placing various deposits and earning interest from the same. The activity carried on could be definitely held as business activity and, hence, any income earned therefrom was to be taxed as business income only.

(ii) That showed that the authorities below, on the basis of the evidence on record, had held that the activity carried out by the assessee was a part of its business activity. That conclusion of the fact could not be interfered with by the Court in an appeal u/s.260A.

(iii) In any event, the Revenue had failed to advance any submission to the effect that the said findings of the fact were contrary to the evidence on record or that the same were in any way perverse.

(iv) In the instant case, the authorities below had held that the income from the interest received by the assessee was a part of the business profit and, as such, in view of the judgment in the case of Alfa Laval India Ltd. v. Dy. CIT, (2003) 133 Taxman 740 (Bom.) the same could not be excluded from the business profit while calculating the deduction u/s.80HHC.