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2013 (1) TMI 395 - AT - Income TaxNotional interest computed on account of a delay in realization of the dues from AE added back for the purposes of arriving at the arm's length pricing u/s 92CA(3) - DR stated that the "receivable from the AE" is an international transaction within the meaning of section 92B - Held that:- Not in dispute that the impugned addition was made prior to the amendment made u/s 92B of the Act by inserting Explanation by the Finance Act, 2012 w.r.e.f. 1-4-2002 and all the decisions of the Tribunal relied on by both the parties are prior to the said amendment. This being so and keeping in view that the assessee has taken certain new plea at the stage of rejoinder reiterating that sale value and interest cannot be regarded as a separate transaction, relied on the second part of the decision in Nimbus Communications Ltd.'s case (2010 (1) TMI 921 - ITAT, MUMBAI) thus in the interest of justice, the matter should go back to the file of the A.O. to decide the same afresh - grounds of assessee partly allowed for statistical purpose. Setting off the past-unabsorbed losses prior to calculating exemption u/s 10A - Held that:- The issue stands covered in favour of the assessee by the recent decision of The Commissioner of Income Tax-10 Versus Black & Veatch Consulting Pvt.Ltd. [2012 (4) TMI 450 - BOMBAY HIGH COURT] Section 10A is a provision which is in the nature of a deduction and not an exemption - the deduction under Section 10A has to be given effect to at the stage of computing the profits and gains of business - Section 80B(5) defines for the purposes of Chapter VI-A “gross total income” to mean the total income computed in accordance with the provisions of the Act, before making any deduction under the Chapter - against revenue. Disqualification of interest income, directly sprang from the business operations, from exemption u/s 10A - Held that:- Following the consistent view of the Tribunal as decided in Jewelex International (P.) Ltd.'s case (2010 (9) TMI 906 - ITAT MUMBAI), Greytrix (India) (P.) Ltd. case (2013 (1) TMI 381 - ITAT MUMBAI) & Tropicate Textiles (P.) Ltd. [2012 (7) TMI 57 - ITAT, MUMBAI] to hold that the assessee is entitled to deduction u/s 10A of the interest income of Rs. 25,002/- on the FD pledged with the bank on account of margin money. As regards the interest on NSC Rs. 248/- and interest on loan to employees Rs. 135,583/- there is no nexus between the interest income and the income derived by the undertaking of the assessee in terms of the provisions of section 10A, therefore, the A.O. was justified in treating the same as income from other sources not eligible for deduction u/s 10A - partly in favour of assessee.
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