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2015 (6) TMI 58 - AT - Income TaxExemption u/s.10B - 'Income from Profits and Gains' - interest received and the consideration received by sale of import entitlement - Held that:- the assessee is a 100% EOU, which has exported software and earned the income. A portion of that income is included in EEFC account. Yet another portion of the amount is invested within the country by way of fixed deposits, another portion of the amount is invested by way of loan to the sister concern which is deriving interest or the consideration received from sale of the import entitlement, which is permissible in law. Now the question is whether the interest received and the consideration received by sale of import entitlement is to be construed as income of the business of the undertaking. There is a direct nexus between this income and the income of the business of the undertaking. Though it does not par take the character of a profit and gains from the sale of an article, it is the income which is derived from the consideration realized by export of articles. In view of the definition of 'Income from Profits and Gains' incorporated in Subsection (4), the assessee is entitled to the benefit of exemption of the said amount as contemplated under Section 10B of the Act. Therefore, the Tribunal was justified in extending the benefit to the aforesaid amounts also. We respectfully following the aforesaid decision of Hon’ble Karnataka High Court in the case of Motorola India Electronics Pvt. Ltd (2006 (11) TMI 541 - ITAT BANGALORE), hold that Assessee is eligible for deduction u/s. 10B of the Act on the interest received on deposits placed with Electricity Department. We thus direct accordingly. - Decided in favour of assesse.
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