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TMI Blog2016 (11) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be made available to the assessees. - Decided against assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... not required to be examined by us. The assessee has also accepted the said position. The only question, raised is whether these two incomes can be taken into consideration while applying Explanation (baa) to Section 80 HHC. The issue is no longer in dispute and has been answered in the case of ACG Associated Capsules Pvt. Ltd. vs. Commissioner of Income Tax, Central-IV, Mumbai (2012) 3 SCC 321. Relied. In this decision, it has been held:- "12.Explanation (baa) extracted above states that "profits of the business" means the profits of the business as computed under the head "Profits and Gains of Business or Profession" as reduced by the receipts of the nature mentioned in clauses (1) and (2) of the Explanation (baa). Thus, profits of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y way of brokerage, commission, interest, rent ,charges or any other receipt of a similar nature is allowed as expenses under Sections 30 to 44-D of the Act and is not included in the profits of business as computed under the head "Profits and Gains of Business or Profession", ninety per cent of such quantum of receipts cannot be reduced under Clause (1) of Explanation (baa) from the profits of the business. In Other words, only ninety per cent of the net amout of any receipt of the nature mentioned in clause (1) which is actually included in the profits of the assessee is to be deducted from the profits of the assessee for determining "profits of the business" of the assessess under Explanation (baa) to Section 80-HHC". 8. The Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to be included in the profits of the business of the assessee as computed under the head "Profits and Gains of Business of Profession", ninety per cent of such quantum of the receipt of rent or interest will not be deducted under clause (1) of Explanation (baa) to Section 80-HHC. In other words, ninety per cent of not the gross rent or gross interest but only the net interest or net rent, which has been included in the profits of business of the assessee as computed under the head "Profits and Gains of Business or Profession" is to be deducted under clause (1) of Explanation (baa) to Section 80-HHC, for determining the profits of the business. 9. In view of the aforesaid position, the questions of law mentioned above are answered in af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the business by virtu of Explanation (baa) (1), but the claim is that the quantum of such interest income to be excluded must be determined in accordance with the computation provisions relating to business by allowing expenditure by way of interest which bears a nexus with the interest receipt." It is also evident from the observation of the Special Bench in para NO. 48 of the decision, which reads as: "The controversy before us has arisen only in the background of the fact that the assessee is engaged in the business of exports and such business has been carried on during the relevant previous year. Obviously, the question of applying section 80HHC and the manner of computing the "profits of the business" of exports in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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