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2013 (1) TMI 178 - HC - Income TaxDeduction u/s 80-IB – Whether the assessee is entitled to deduction u/s 80IB on interest earned by him on FDRs kept as guarantee with Electricity Department and the Bank for securing bank limits - Interest earned on Fixed deposit (FDR) - Business income of an Industrial Undertaking or Income from other sources - Profits and gains derived from such industrial undertakings or profits and gains derived from any business Held that:- No, interest income on FDRs declaring it as income from the business of the industrial undertaking, cannot be said to be an income flowing from the business activity of industrial Undertaking, thus, cannot be computed for deduction u/s 80-IB. Section 80-IB(4) would reveal that reference made to 'profits and gains derived from such industrial undertakings' and not to 'profit and gains derived from any business of the industrial undertaking'. A conjoint reading of Section 80-IB(l) and 80-IB(4) would reveal that the expression 'profits and gains derived from any business' is to be read as 'profits and gains derived from the industrial undertaking' and the scope and ambit of Section 80-IB(1) is not in any manner wider than that of 80-IB(4). A holistic view of Section 80-IB would reveal that what is intended by the Law Makers to qualify for deduction is 'profits and gains derived from the industrial undertaking'. 'There is, therefore, no reason to bring within the fold of 'profits and gains derived from industrial undertakings' any income beyond the activities of the industrial undertakings on the ground that the words 'any business' finds expression in 80-IB(l). In favour of revenue Whether interest income allowed to set off against the interest paid – Held that:- Following the decision in case of Dr. V. P. Gopinathan (2001 (2) TMI 10 - SUPREME COURT) that the interest paid by the assessee as interest on overdraft facility cannot be set off against the interest received on the FDRs pledged by him with the Bank so as to avail any deduction under the head 'Income from other sources'. Hence set off not allowed. In favour of revenue
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