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TMI Blog2011 (10) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... r the purpose of calculating the deduction u/s.80HHC of the Income Tax Act, 1961? Rs. 2. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the interest income was not to be assessed under the head "Profits & Gains of Business and Profession"?" 2. The assessee is carrying on export business. In order to avail the credit facilities, according to the assessee, it has deposited a sum of Rs.300.0 lacs with the Bank. The interest derived from such deposit whether to be treated as "business income" or "from other sources" was a question to be decided by the Assessing Authority. Originally, the Assessing Authority has accepted the said interest as business income. However, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the various credit limits and facilities, the Bench has decided in favour of the Revenue. For proper and better appreciation of the case, it is extracted here under:- " 2. The assessee is a firm doing business in export of tanned and finished leather. It had obtained credit facilities from the overseas branch of the State Bank of India, Madras. The assessee had, in the same bank, made deposits to the tune of Rs.139.14 lakhs, on which it received interest at the rate of 10 per cent. The assessee's claim that the interest received by it on those deposits should be treated as part of the income from business was negatived by the AO as also by the CIT, but was upheld by the Tribunal. The assessee did not produce the letters from the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would retort that there is absolutely no record to show that in respect of assessment years 1990-91 and 1991-92, out of compulsion, the amount has been deposited by the assessee to the Bank for the purpose of sustaining his business. Therefore, no fault can be found in the order of the Tribunal. 7. Learned counsel appearing for the assessee would rely upon the letter of the State Bank of India, Overseas Branch dated 19.10.1993, in which it is stated as follows:- " With respect to various credit facilities extended to the company, we draw your attention to the necessity of maintaining margin for the non-fund based limits sanctioned to your company and to cover any excess drawings in the fund-based limits. In this connection, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Bank is not in dispute and availing interest from such deposit is also not disputed. The question to be decided for the purpose of availing the said provision is as to whether the deposit is a condition precedent and it is mandatory for the purpose of running business so as to treat the said income under the head "business". 10. No useful purpose would be served in remanding the matter to the assessing Authority, since we are satisfied that the letters produced before us do not show that they relate to the particular assessment year and the amount was deposited out of compulsion and mandatory. In such view of the matter, the plea made by the learned counsel appearing for the assessee that the matter may be remanded to the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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