TMI Blog2012 (7) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... t has to necessarily be treated as income from other sources and not business income - as the net interest income which has to be excluded from the eligible profit for grant of deduction under sec. 80-IC and Learned first appellate authority on an ad hoc basis allocated 50,000 rupees towards administrative expenses for earning interest income, remit the issue to the file of the Assessing Officer for allocation purposes. - ITA No.4072 & 4882/Del/2011 - - - Dated:- 22-6-2012 - SHRI G.D. AGRAWAL, AND SHRI RAJPAL YADAV JJ. Assessee by: Shri Suresh Ananthram, CA Department by: Shri S Krishna, CIT(DR) ORDER PER RAJPAL YADAV: JUDICIAL MEMBER The assessee and revenue are in cross-appeal before us against the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally be treated as filed in response to this notice. Learned Assessing Officer has observed that assessee company is primarily engaged in growing and processing of mushroom, culinary herbs and other fruits and vegetables. It has declared turnover of Rs.23.81 crores. It has shown business income of Rs.2.95 crores and claimed deduction under sec. 80-IC of the Act. While analyzing the assessee s claim for deduction under sec. 80- IC, learned Assessing Officer found that it contained interest income of Rs.48,41,738 which does not qualify for grant of deduction under sec. 80-IC. Learned Assessing Officer excluded this amount from the eligible profit for the purpose of computation of deduction. He made following discussion: 4.1 During the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Delhi High Court in the case CIT vs. Sri Ram Honda Power Equip reported in 289 ITR 475 has held that interest income is to be assessed as income from other sources, meaning thereby, it will not qualify for deduction under sec. 80-IC. However, learned counsel for the assessee submitted that the Hon ble Court has observed that only net interest income is to be excluded from the eligible profit. For buttressing his contentions, he further relied upon the judgment of Hon'ble Karnataka High Court rendered in the case of CIT vs. M/s. Buhler India Ltd. passed in ITA No.123 of 2006. This decision has been delivered on 14th September 2011. The learned counsel for the assessee has placed on record copy of this decision. The question which is r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not advanced any arguments with regard to the proposition that on interest income deduction under sec. 80-IC is admissible, therefore, there is no idea to examine the provisions of sec. 80-IC and in what condition the computation for such deduction has to be made. According to the judgment of Hon'ble Delhi High Court in the case of CIT vs. Sri Ram Honda, interest income has to be assessed as a income from other sources. In paragraph 26 of the judgment, Hon ble Court has observed that interest income on fixed deposit for the purpose of availing of credit facility from the bank does not have an immediate nexus with the export business and, therefore, it has to necessarily be treated as income from other sources and not business income. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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