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2014 (1) TMI 1782 - AT - Income TaxDeduction u/s 80IB - whether the activities of the units do not constitute manufacture or production of any articles or things as specified in section 80-IB? - Held that:- ITAT has been consistently granting relief to the assessee by holding that the activity of the assessee is a manufacturing activity and therefore, it is eligible for deduction u/s 80IA of the Act. As well, no contrary material has been brought to our notice by the Revenue to take a different view than that of the earlier views taken by the ITAT. Therefore, in these circumstances, following the principle of consistency, we are of the considered opinion that the assessee should get relief and accordingly the grounds raised by the Revenue are dismissed. Income derived on the margin money for obtaining bank guarantee - nature of Income - Held that:- Interest derived on margin money for the purpose of obtaining bank guarantee should be assessed as "business income" instead of "income from other sources". Benefit of netting off of interest income against the expenditure - Held that:- Both the parties stated that the said claim of the assessee needs to be considered in favour of the assessee in view of the binding judgment of the Hon‟ble Apex Court in the case of ACG Associated Capsules P. Ltd vs. CIT [2012 (2) TMI 101 - SUPREME COURT OF INDIA] wheren held Ninety per cent of not the gross interest/rent but only the net interest/rent, which has been included in the profits of the business of the assessee as computed under the heads ‘PGBP’ is to be deducted under clause (1) of Explanation (baa) to Section 80HHC for determining the profits of the business. Accordingly, we direct the AO to apply the said judgment on considering the facts of the present case after reasonable opportunity of being heard to the assessee as per the principles of the natural justice.
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