S.H. Kapadia, J.

1. Since all the above three appeals deal with common questions of fact and law they are jointly disposed of by this judgment.

2. The assessee is a 100 per cent, exporter. The assessee is wholly engaged in export business. The entire business income is from exports. The assessee credited in the profit and loss account for the assessment year 1989-90, interest income while working out the deduction under Section 80HHC by considering these amounts as part of business profit. The Assessing Officer held that interest income cannot be treated as profit relating to business exports and, accordingly, while working out the business profits for the purposes of Section 80HHC, the Assessing Officer reduced the interest income from the business profit. The Assessing Officer held that the deduction under Section 80HHC was meant for the assessee who earned profits from exports and any business profits other than from export activity was not eligible for deduction under Section 80HHC. Being aggrieved, the assessee filed an appeal to the Commissioner of Income Tax (Appeals). Both the first appellate authority and the Tribunal found, on the facts, that the assessee was a 100 per cent, exporter, that, Section 80HHC{3)(a) was applicable to the facts of the case and, therefore, the Assessing Officer erred in deducting the interest income from the business profits of the assessee. Being aggrieved by the decision of the Tribunal, the Department has come in appeal under Section 260A.

3. It was urged on behalf of the Department that the interest income cannot be treated as profit relating to exports. It was contended that for the purposes of Section 80HHC(3)(a), the business profits were required to be worked out. It was contended that deduction under Section 80HHC(3)(a) would not apply to this case to the extent of the interest income as such income did not accrue on account of any export activity and further any business profit from an activity which was not an export activity was not eligible for deduction under Section 80HHC.

4. We do not find any merit in the above contentions. At the outset, it may be mentioned that the grounds of appeal are vague. None of the above contentions find place in the memo of appeal. The statement of facts in the memo of appeal are also not borne out by the facts of the case. In the statement of facts vide para. 4(a), it is mentioned that the Assessing Officer has treated the interest income as income from other sources whereas the impugned judgment and the order of the Assessing Officer proceed on the footing that the interest income was business income, but it was not an income from exports [see para. 2 of the impugned judgment of the Tribunal]. Hence, we refuse to go into the larger questions of law canvassed by the learned counsel for the department. Suffice it to say that in this matter, the assessee is a 100 per cent, exporter. In this case, Section 80HHC(3)(a) is applicable as the assessee is a 100 per cent, exporter. Hence, the entire business income is deemed to be profit derived from export of goods. Therefore, the interest income could only fall under "business income". Section 80HHC(3)(a) deals with a 100 per cent, exporter whereas Section 80HHC(3)(b) deals with composite business. In the latter case, local sales are included. Hence, the entire profits are entitled to deduction. This would include interest income also.

5. In the circumstances, the above appeals stand dismissed with costs.