Clarification on explanation [(baa)] to section 80hhc of the i.t. act
Manoj Yadav
(Querist) 27 December 2011
This query is : Resolved
As per the explanation [(baa)] to section 80HHC of the I.T. Act: Profit of the business means Profit of the Business as computed under the head "profits and gains of Business or Profession" as reduced by, inter alia, 90% of receipt by interest. In this connection whether interest income ought to be considered net of Interest expenses. ( Refer : Honda Siel Power products ltd. v Dy CIT) [2000] and Pink star v. CIT [2000]
soumitra basu
(Expert) 30 December 2011
Interest can be netted provided the earning of interest and payment of interest has a direct link. Otherwise the inbterest income shall be treated as income from other sources and the expenditue shall be treated as business expenditure.
