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2013 (9) TMI 44 - ITAT, CHANDIGARHDeduction u/s 80IC - Interest on the amounts due from dealers - Whether the income received by the assessee by way of interest on the amounts due from dealers was the income of first degree of the undertaking, making it eligible for the benefit of deduct ion u/s 80IC of the Act - Held that:- Section 80IC of the Act provides that where the gross total income of an assessee, includes, any profit and gain derived by an undertaking/enterprise from any business, then in accordance with the provisions of sub-sect ions, would be entitled to deduction from such profits and gains as computed under sub-sect ion (3) of the Act and the same shall be deducted while computing the total income of the assessee. The basis for grant of deduct ion u/s 80IC of the Act are the profits and gains ‘derived’ by an undertaking from the business carried on by it - The provisions of Sect ion 80IC of the Act are par imateria to Section 80IA/80IB of the Act. The words in section 80IC are also “profits derived from business of under taking”. Interest received on the overdue payment from its dealers constituted the price of the goods sold by the assessee and such interest income is derived from the manufacturing activities carried on by the assessee and are business income eligible for deduct ion u/s 80IC of the Act - Following decision of Commissioner of Income-tax versus Vidyut Corporation [2010 (4) TMI 229 - BOMBAY HIGH COURT] - Decided in favour of assessee. Other income shown by the assessee i.e. interest income received from bank and dividend income are not derived from the profits and gains of the business and not eligible for deduct ion u/s 80IC of the Act. Profit on sale of fixed asset reflected at Rs. 1.20 Lakhs is book entry under the head “other income” and the same is to be excluded as the said profit is to be considered in the computation of income while al lowing depreciation on assets. - Decided against the assessee. The income from processing fee of Rs. 4.45 lakhs and exchange gain of Rs. 0.11 lakhs are also not derived from the profits and business and consequently not eligible for deduct ion u/s 80IC of the Act. - Decided against the assessee. Depreciation - date of put to use - date of commencement of business - Held that:- The assessee has furnished on record the evidence by way of sanctions/approvals taken from the Pollution Control Board and Electricity Department, which are placed at pages 60 to 62 of the paper book under which the product ion of new unit has been shown from 14.10.2006. The assessee has also submit ted a copy of electricity Bill under which it claims that the power sanction for Furnace was put to use on 14.10.2006 - claim of depreciation allowed - Decided in favour of assessee.
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