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Acg Associated Capsules P.Ltd vs C.I.T Central-Iv Mumbai on 8 February, 2012

From the aforesaid decision of the Hon'ble Supreme Court it is clear that 90% of the net interest and not the gross interest which has been included in the properties of the business of the assessee as computed under the head profits and gains of business or profession is to be deducted under clause (i) of Explanation (baa) to section 80HHC for determining the profits of business. It is evident from para 2.3 of the CIT (A)'s which has been extracted herein above, the CIT (A) has directed the AO to find out whether there is nexus on the interest receipts and the interest payment and if there is a nexus, then interest receipt should be set off against interest payment before excluding 90% thereof in terms of clause (baa) of Explanation to 80HHC of the Act. In our view, the direction of the CIT (A) is in accordance with law and therefore needs no inference. While giving effect to the direction of the CIT (A), the AO shall also keep in mind the principles of law laid down by the Hon'ble Supreme Court in the case of ACG Associated Capsules Pvt. Limited (supra).
Supreme Court of India Cites 14 - Cited by 297 - A K Patnaik - Full Document
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