Y.K. Kapur, Member (J) - (1.) IN this appeal filed by the Revenue the challenge is to the order of the CIT(A) dated 3rd January, 1998 on the ground that the CIT(A) has erred in holding that the bank interest and the claim received by the assessee should have been included under the head "profit and gains of business of profession" while calculating deduction u/s 80-HHC of the IT Act.
(2.) The brief background of the present litigations is that the assessee filed its return of income declaring its total income which included from the following heads :- JUDGEMENT_3175_TLIT0_20020.htm Out of the aforesaid items, the AO and the CIT(A) held the amount of Rs 2, 700/- and Rs. 14, 907/- to be not the business income of the assessee as according to the authorities below, there was no nexus between the receipts and the business of the assessee. The assessee has accepted the findings of the authorities below on these two items.
(3.) REGARDING the other two items, i.e., item No. 1 and No. 2, the grievance of the Revenue is that the said claims ought to have been held to be the business income of the assessee. To adjudicate these two items, it would be necessary to refer to relevant facts on the record. :- (i) As far as the claim for the bank interest is concerned, the case of the assessee before the authorities below was that the assessee has to obtain letter of credit from the hanks for the purposes of the export business. (ii) According to the assessee, the bank wanted certain margin money which was created in the form of FDRs taken from the bank against which the desired letters of credits were issued.;