S. 80HHC: EEFC foreign exchange fluctuation and interest not eligible: Bombay High Court

CIT Vs. Shah Originals (Bombay High Court) The assessee, an exporter, claimed deduction u/s 80HHC on account of foreign exchange fluctuation and interest in the EEFC account on the ground that it was part of business income and arose from exports. The AO & CIT (A) rejected the claim though the Tribunal allowed it. On appeal by the Revenue, HELD reversing the Tribunal: (i) S. 80HHC allows a deduction in respect of the profits “derived” from exports. The term ‘derived’ is of a narrower connotation than the term ‘attributable to’ and postulates the existence of a direct and proxim...