Netting of Interest receipt not allowed for Calculating deduction u/s. 80HHC: Bombay HC

Explanation (baa) to s. 80HHC provides that 90% of interest, rent etc has to be reduced from the “Profits & gains” for purposes of s. 80HHC. In Lalsons Enterprises 89 ITD 25, the Special Bench of the Tribunal held that in computing the said interest, rent etc, the assessee was permitted to net off the interest receipt against the interest expenditure (having a nexus with the receipt) and only the balance could be reduced. This view was affirmed by the Delhi High Court in Shri Ram Honda Power Equipment 289 ITR 475 (Delhi)

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