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TMI Blog2008 (1) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... est received by it on fixed deposits which were pledged with the Bank of Rajasthan for obtaining the loan. 3.It appears to us that the matter is fully covered by the decision of this court in CIT v. Shri Ram Honda Power Equip [2007] 289 ITR 475 and that no substantial question of law arises. 4. In paragraphs 35 and 36 of the above decision, this court has considered two categories of fixed deposits taken by the assessee. The first category is fixed deposits taken by the assessee for the purposes of parking of its surplus funds. The second category is fixed deposits that have been taken by the assessee for mandatorily keeping the monies with a bank for the pur poses of availing of credit facilities, etc., for its export business. This cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed in the case of the assessee. 7. The second question that would arise, as a result of the decision of this court, is whether the deduction claimed by the assessee on the interest d from these fixed deposits can be adjusted against the interest paid by the assessee to the Bank of Rajasthan in view of Explanation (baa) to 80HHC of the Income-tax Act, 1961. 8 In paragraph (ix) of the decision rendered by this court under the heading "Conclusions", it has been held as follows "Where, as a result of the computation of profits and gains of business and profession, the Assessing Officer treats the interest receipt as business income, then deduction should be permissible, in terms of Explanation (baa) of the net interest, i.e., the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direct nexus with the payment of interest. The Tribunal has also recorded in paragraph 4 of the order that the interest received and paid have a close nexus, on the facts found by the Commissioner of Income-tax (Appeals) which were not disputed before the Tribunal. 13 This being the factual position, it is quite clear that the assessee had I been able to establish the nexus as required by paragraph (ix) arrived at by this court in CIT v. Shri Ram Honda Power Equip. [2007] 289 ITR 475. As mentioned above, this is a finding of fact which cannot be disturbed unless and until some perversity is shown. In so far as the present case is concerned, we do not find any perversity in the factual conclusions drawn by the Tribunal and the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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