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2014 (10) TMI 207 - AT - Income TaxJurisdiction of the CIT u/s 263 – Deduction u/s 10AA - Whether the view adopted by the AO in the assessment order to the effect that such interest income forms part of profit and gains of business of SEZ unit and therefore qualifies for deduction u/s 10AA is a possible view or not – Held that:- The assessee besides others also has a SEZ Unit in which it is engaged in the business of re-export of bullion, import of bullion etc. - the income derived from business of SEZ Unit qualifies for deduction u/s 10AA of the Act - In the assessment framed u/s 143(3) of the Act by the AO for both the years allowed deduction u/s 10AA of the Act to the assessee as claimed by the assessee - the assessee imports bullion on credit of 360/90 days - for the purpose of above imports, the assessee has to open the Letter of Credit with bank and consequently the assessee is required to make FDRs with bank which gives right to interest income in the hands of the assessee - The assessee exports the imported bullion on immediate payment basis. As decided in assessee’s own case for the earlier assessment year, it has been held the interest income which were earned by the assessee were from fixed deposit receipts with bank which were made by the assessee in the course of its trading business of import for the purposes of re-export, for obtaining Letter of Credit for its purchases - the relevant fixed deposit receipts on which interest were earned were business assets of the assessee acquired in the course and for the purposes of its business - The fixed deposit receipts being business assets, there was no reason as to why interest income earned from such fixed deposit receipts could not be assessed as business income of the assessee. The view adopted by the Assessing Officer showing interest income under consideration is business income cannot be held as not a possible view and therefore, the Commissioner of Income Tax was not justified in interfering with the said view in the impugned order. Exemption u/s 10AA - exclusion of interest income - Held that:- The specific provision like explanation (baa) of section 80HHC which provides for exclusion of 90% of interest income from the profits of business to arrive at the profits of the business has not been provided by the legislature in section 10AA of the Act – in Sm. Tarulata Shyam Vs. CIT [1977 (4) TMI 3 - SUPREME Court] - there is no scope for importing in the statute words which are not there – there is no provision in the statute on the basis of which it can be held that the interest income which forms part of the profits of the business is to be excluded for arriving at profits derived from “export of articles or things or services” as prescribed under sub-section (7) of section 10AA of the Act - the CIT was not justified in interfering with the same in exercising the power u/s 263 of the Act – the order of the CIT is set aside – Decided in favour of assessee.
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