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TMI Blog2013 (6) TMI 249X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is assessable under the head ‘profits and gains of business or profession’. As in the instant case, the lower authorities have not verified the nature and source of six receipts in question properly, it shall be fair and in the interest of justice to restore this issue back to the file of the AO for deciding afresh by passing a speaking order after allowing proper opportunity of hearing to the assessee. The profits and gains derived from export which is allowable as deduction u/s 10B is to be computed in accordance with the provisions of section 10B(4) wherein profits and gains of the undertaking is to be ascertained which may not be same as the amount assessable under the head ‘profits and gains of business or profession’ of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other sources and also did not consider the same for calculating the eligible profit for exemption u/s 10B of the Act. 4. On appeal before the CIT(A), the assessee claimed that the said income may not be income derived from the business eligible u/s 10B, however it is business income of the assessee. The CIT(A), after considering the submission of the assessee, observed that the assessee was engaged in the business of export of software development and procure export order from its subsidiary, M/s Summit Works Technologies Inc. having its business in USA. As a gesture of reciprocity or generosity the assessee was recruiting software engineers or computer professionals etc for its subsidiary in USA without charging any fees. The expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear or did not join it. Therefore, the amount received was not contingent. He submitted that it was the business of the assessee to recruit technical persons and send them abroad and therefore, it was part and parcel of the business income of the assessee and should have been considered accordingly while computing the deduction u/s 10B of the Act. 6. The DR, on the other hand supported the order of the CIT(A). 7. We have heard the rival submissions and perused the orders of the lower authorities and materials available on record. In the instant case, the Assessing Officer excluded Rs. 38,01,867/- from the business income declared by the assessee and assessed the same under the head income from other sources . The said amount of Rs. 38, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the same ought to be held as assessable under the head business income. 11. Regarding interest on fixed deposits, the assessee submitted that fixed deposits were made for business purposes and therefore, interest income arising from business assets was assessable under the head business income . In respect of excess amount received from parties and others, the assessee submitted that the said amount was received during the course of business and therefore, was assessable as business income. 12. On the other hand, the DR supported the orders of the lower authorities. 13. We find from the heading of the assessment order that the Assessing Officer has mentioned the nature of business of the assessee as software development and sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is under the scheme of the I.T.Act assessable under the head profits and gains of business or profession in view of the provisions of section 28 of the Act or is assessable under the head income from other sources in view of the provisions of section 56 of the Act. In our considered view, business means any activity carried on by the assessee systematically and regularly for the purposes of earning profit. A receipt during the course of the business is a receipt which is attributable to the business activity of the assessee or a receipt of the assessee which has a nexus direct or indirect with the business of the assessee or receipts arising out of the business asset of the assessee is assessable under the head profits and gains of busin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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