JUDGMENT Deepak Verma, J.—Shri S. Parthasarathy for the appellant and Shri M.V. Seshachala for the respondent. 2. The appellant/assessee is before us challenging the correctness, propriety and legality of the order passed by the Income Tax Appellate Tribunal on January 9, 2002, in I.T.A. No. 934/Bang/1993 for the assessment year 1990-91, under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as "the Act" for brevity). The appeal before the Tribunal was at the instance of the Revenue against the order of the Commissioner of Income Tax (Appeals), dated March 1, 1993. Even though the appeal has been admitted on the following substantial questions of law, namely: (1) Whether the interest earned by the appellant out of the deposits were excludible from the eligible profits for the purpose of deduction under Section 32AB of the Act? (2) Whether in view of the provisions of Section 32AB(3) of the Act, the Tribunal was justified in excluding the interest which formed part of the profits computed in accordance with Parts 2 and 3 of Schedule VI to the Companies Act, 1956, for the purpose of quantifying the deduction under Section 32AB of the Act? (3) Whether the Tribunal was justified in holding that the surplus out of the amount approved by the Government for meeting additional expenditure by the appellant would constitute the income in spite of the fact that the said amount was held in a fiduciary capacity by the appellant on behalf of the Government of Karnataka? 3. However, at the time of hearing, learned Counsel for the appellant fairly conceded that question No. 2 would not arise for consideration. Thus, we are required to consider questions Nos. 1 and 3 as mentioned hereinabove. 4. The facts of the case lie in a narrow compass, which are as under: The appellant is a Government owned company and is basically engaged in the manufacture of food products, cereals and cattle feed, etc. The appellant-assessee had claimed deduction under Section 32AB of the Act amounting to Rs. 31,73,000, while doing so out of the aforesaid total amount, a sum of Rs. 12,73,552 being the interest earned by the assessee was included as eligible profits for quantification of profit under Section 32AB of the Act. The appellant-assessee had claimed deduction under Section 32AB of the Act amounting to Rs. 31,73,000, while doing so out of the aforesaid total amount, a sum of Rs. 12,73,552 being the interest earned by the assessee was included as eligible profits for quantification of profit under Section 32AB of the Act. The aforesaid interest income was out of the deposit made by the assessee with the Karnataka Electricity Board and also other short-term deposits made by it, out of the surplus business funds. The assessing authority held that the appellant, was not entitled to quantify the deduction under Section 32AB of the Act in respect of the interest income, as the same was net arising directly out of the business activity earned on by the assessee. In view of this, the Assessing Officer did not allow a sum of Rs. 12,73,552 interest earned by the assessee to be reduced out of the eligible profits for quantifying the actual profit under Section 32AB of the Act. 5. Further, the Assessing Officer also included a sum of Rs. 9,36,436 being the amount collected towards developmental/administrative expenses as income without accepting the assessee's claim that the amount did not represent its earning, as was the same was held by the assessee in a fiduciary capacity on behalf of the Government of Karnataka. If that be so obviously, it was not liable to tax. 6. According to the assessee, certain amount was deposited by the Government of Karnataka, under the agreement which was entered into between the Union of India and US agency for International development for import of yellow maize (corn) under an US aid maize programme. The Union of India had designated "NAFED" as its agency to handle aid maize programme on behalf of the Union of India. The designed agency in turn appointed State level agency for distribution of aid maize. In the State of Karnataka, the assessee was identified as a State level agency. Accordingly, it was required to handle and distribute maize amongst actual target beneficiaries, in accordance with the guidelines provided by NAFED. For the services rendered by the assessee in this regard, it was only to receive certain service charges from NAFED at the rate of Rs. 15 per metric ton. According to the assessee, the said amount of service charges of Rs. For the services rendered by the assessee in this regard, it was only to receive certain service charges from NAFED at the rate of Rs. 15 per metric ton. According to the assessee, the said amount of service charges of Rs. 15 per metric ton was too meagre and low, so it wanted to enhance it by a further sum of Rs. 10 per bag of maize from each of the beneficiaries, who had received maize from the assessee. The Government of Karnataka on principle had agreed that the assessee would be entitled to charge Rs. 10 more per bag from the beneficiaries. 7. The Assessing Officer brought to tax the surplus out of the recovery made by the appellant, over and above the expenditure incurred by the assessee, holding the same to be the revenue receipts without accepting the assessee's contention that surplus was held by it only on behalf of the Government of Karnataka in a fiduciary capacity, thus the same could not have been brought within the net of taxable income. 8. On the aforesaid two counts, the Assessing Officer recorded a cryptic and perfunctory finding against the assessee. Feeling aggrieved by the same, the assessee was constrained to file an appeal before the Commissioner of Income Tax (Appeals). On both the counts, the Commissioner of Income Tax (Appeals) found that the interest earned by the assessee could not have been treated as income from other sources instead it should be treated as income from business as it was directly linked with the business activities carried on by the assessee. With regard to the other ground, a finding has been recorded in favour of the assessee holding therein that the amounts so collected from the beneficiaries was held by the assessee only in the fiduciary capacity, thus, could not have been added to the income of the assessee. 9 Thus Revenue filed an appeal before the Income Tax Appellate Tribunal. In the appeal before the Tribunal, the assessee also preferred cross-objections. Both were taken up for consideration together. The appeal of the Revenue has been allowed. The order passed by the Commissioner of Income Tax (Appeals) has been quashed and the order passed by the Assessing Officer has been restored. As regards cross-objections filed by the assessee, the same were also rejected. Now, this appeal against the said order of the Tribunal by the assessee. 10. The appeal of the Revenue has been allowed. The order passed by the Commissioner of Income Tax (Appeals) has been quashed and the order passed by the Assessing Officer has been restored. As regards cross-objections filed by the assessee, the same were also rejected. Now, this appeal against the said order of the Tribunal by the assessee. 10. Learned Counsel for the appellant strenuously submitted before us that in the light of peculiar facts and features of the case, the Assessing Officer should have examined, "whether the interest income was directly related to the business activities of the assessee or not?". But this finding has not been recorded specifically by him. Still, he proceeded to treat the business income as the income from other sources whereas he should have included it as business income or as incidental to the business activities being carried on by the assessee. With regard to other question, it has been submitted that no clear cut findings have been recorded to come to the conclusion, if the amounts collected from the beneficiaries with regard to aid maize could be treated as income in the hands of the assessee or it would be an amount collected by the assessee and held in a fiduciary capacity for the State of Karnataka. 11. During the course of arguments, learned Counsel for the appellant further contended that the Tribunal has erroneously placed reliance on a judgment of the Gauhati High Court reported in CIT v. Dinjoye Tea Estate P. Ltd. [1997] 224 ITR 263, to come to the conclusion that interest and dividend are not includible in income for the purposes of calculating deduction under Section 32AB of the Act. 12. It is to be seen that it was a reference to the High Court of Gauhati under Section 256(1) of the Act (since amended) wherein the following question was formulated to be answered by the High Court: Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that interest and dividend are to be included in income for the purposes of deduction under Section 32AB of the Act? 13. 13. In view of the question of law referred to the High Court, it has been contended that it was not required on the part of the High Court to have considered the implication of Section 32AB(3) of the Act and any finding recorded therein would only be obiter and not binding. 14. It is now well-settled that what is binding precedent is that which was referred to and has been answered by the court. And what ultimately the court decides there is the ratio decidendi and becomes binding precedent. In the reference before the High Court of the Gauhati the effect to implication of Sub-section (3) of Section 32AB of the Act had not at all been referred to. Hence, any passing remarks made thereon shall not have adverse effect to the facts of this case. 15. Learned Counsel for the appellant further submitted that the issues projected in this appeal have been answered by two judgements of the Madras High Court and the Calcutta High Court reported in Carborandum Universal Ltd. Vs. Commissioner of Income Tax, (2004) 265 ITR 372 Mad and Assam Brook Ltd. Vs. Commissioner of Income Tax, (2004) 267 ITR 121 Cal respectively. 16. Per contra, learned Counsel for the respondent Shri M.V. Seshachala submitted that now the questions projected herein are no more res integra, as the same have been set at rest by a recent Full Bench judgment of the Kerala High Court reported in Parry Agro Industries Ltd. Vs. Commissioner of Income Tax, (2006) 285 ITR 440 Ker. A Full Bench of the Kerala High Court was considering the following question of law which was referred to it under Section 256(1) of the Act. (since amended): Whether, on the facts and in the circumstances of the case, the Tribunal right in holding that the profits of eligible business computed in accordance with law, requirements of Parts II and III of Schedule VI to the Companies Act, 1956, should be reduced by income from coffee sales, arecanut sales, loan receipts, interest and subsidy from tea board, for the purposes of computing the deduction allowable under Sub-clause (ii) of clause (b) of Section 32AB(1)? 17. 17. The Full Bench has answered this question, in the following manner: We are of the opinion that for the reasons given hereinbelow for the purposes of computing the quantum of deduction under Section 32AB only that income which forms profits and gains of business or profession of the assessee-company is liable to be taken into account and not the income from other sources like rent income, interest income and sundry receipts as claimed by the assessee. 18. Despite the opinion having been expressed by the Full Bench of the Kerala High Court, learned Counsel for the appellant still attempted to hammer before us that what is actually to be seen is from the facts and features of each case, whether the interest income is directly related to the business activities of the assessee or it was an income from other sources. To canvass this point further, it has been submitted that a finding has to be recorded in this regard and the order passed by the Assessing Officer is bereft of this finding. To further reinforce the point in this regard, another Division Bench judgment of this Court reported in Commissioner of Income Tax Vs. Producin P. Ltd., (2007) 290 ITR 598 KAR has been put into service. The Division Bench has held as under (headnote): So as to come to the conclusion as to what would in fact constitute a business income and what would constitute as income from other sources held (i) that what is business income and what is not business income has to be determined on the facts of each case. In the instant case, the main activity of the assessee was export business and not that of earning interest on short-term fixed deposits. The deposits in the bank were made with the money received as advance in the export business. The assessee instead of keeping that amount idle, since it did not require it for its immediate business activity, had deposited that amount by way of short-term deposit in the bank and the amount so deposited was the funds which it had received towards the export to be made by it and the amounts so deposited in the bank and the interest income derived because of such deposit had a close link with the business activity of the assessee-company and, therefore, the interest on bank deposits was assessable as business income 19. We have been given to understand that this matter, Commissioner of Income Tax Vs. Producin P. Ltd., (2007) 290 ITR 598 KAR was carried to the Supreme Court and after considering the matter, the Supreme Court has remanded it to the Tribunal for fresh decision in accordance with law and to examine categorically, "whether the interest income received by the assessee on short-term fixed deposits constituted part of the total turnover of the assessee's total business and also whether it formed part of the total business income of the assessee?" 20. In the light of the foregoing discussion and after critically examining the order passed by the Assessing Officer, we are of the opinion that the Assessing Officer has failed to record any specific and categorical findings with regard to the facts of this case, the nature of the business activities being carried out by the assessee and the reason for its earning interest on certain deposits. The same have not been gone into in detail to record a finding if it would form part of business income or it would be income from other sources. In view of this, we are of the, considered opinion that the matter deserves to be remitted to the Assessing Officer for recording a finding in this regard, after giving an opporturtity of hearing to the assessee to prove its contention. 21. Similarly, with regard to the other issue dealing with aid maize programme, the Assessing Officer should have recorded a finding, "whether the amount received by the assessee from the beneficiaries of aid maize programme was held by the assessee in a fiduciary capacity for the State of Karnataka or not?". A clear finding in this regard is altogether missing. Thus, for this issue also, we are of the opinion that the matter deserves to be remanded to the Assessing Officer for recording a finding on this as well. In view of this, we refrain from answering the questions of law as projected in this appeal, instead, direct the Assessing Officer to decide the aforesaid questions first, then to record a finding then and only then to pass an appropriate order in accordance with law. The appeal accordingly stands disposed of.