2007 (1) TMI 590 - HC - Income Tax

Summary

Issues involved: Interpretation of deduction under section 80HHC of the Income-tax Act regarding netting of interest paid against interest received.

Summary:
1. The High Court framed the substantial question of law regarding whether the ITAT was correct in allowing the assessee to reduce interest paid against interest received for calculating deduction under section 80HHC.

2. The Tribunal upheld the assessee's claim for netting interest paid and received based on the decision in Lalsons Enterprises v. Dy. CIT [2004] 89 ITD 25 (Delhi) (SB), but remitted the matter to the Assessing Officer to verify the nexus between the interest paid and received.

3. The High Court found no reason to interfere with the Tribunal's directions, stating that it is consistent with their decision in similar appeals. The Assessing Officer was instructed to proceed in accordance with the judgment.

4. Consequently, the appeal was dismissed by the High Court.