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2014 (11) TMI 63 - HC - Income TaxClaim of exemption u/s 10B Interest on bank deposits kept for opening Letters of Credit Interest received against public issue of shares Interest earned on ICDs Held that:- Obtaining of letters of credit is an essential activity for undertaking exports, and the deposit of amounts for that purpose is a condition precedent - If the deposits so made have yielded interest, it certainly is attributable to or can be said to be derived from, the activity of export. Assessee gone for public issue to mobilise the resources - The intending purchasers of the shares made deposits corresponding to the value of the shares, which they propose to purchase between the date of application and date of allotment of shares or rejection of application, as the case may be, the amounts yielded interest - The interest so yielded cannot be said to be an income derived from 100% export activity - Before it has allotted shares, the assessee has taken away the money deposited by the intending purchasers of shares and has invested in some companies - The interest that is earned from such deposits was sought to be clubbed with the amount representing profits and gains derived from 100% export activity - thus, the order of the Tribunal is partly set aside regarding the interest received against public issue of shares and interest earned on ICDs and the order relating to interest earned in respect of bank deposits kept for opening Letters of Credit is sustained Decided partly in favour of revenue.
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