Receipts with no nexus to exports have to be excluded for while computing 80HHC deduction

Explanation (baa) to s. 80HHC defines the term “profits of the business” to mean business profits as reduced by 90% of .. “receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature“. The Tribunal took the view, on the basis of Bangalore Clothing 260 ITR 371 (Bom) that receipts towards recovery of freight, insurance, packing receipts, sales tax set off/refund and service income were “operational income” and not liable to be excluded under Expl (baa) to s. 80HHC. On appeal by the Revenue, HELD reversing the Tribunal: (i) The ratio of R...