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2015 (10) TMI 938 - AT - Income TaxDisallowance of the deduction claimed u/s 80IB on interest received on FDR - "Income from other sources" or "income from business and profession" - AO denied the claim of deduction u/s 80IB taking the view that income earned by way of interest from FDRs cannot be treated as income from industrial undertaking, thus he treated the interest income as Income from Other sources - Held that:- Almost all the FDRs were issued in favour of the assessee by the Bank prior to the assessment year 2008-09 as it was necessary and compulsory for getting the CC Limit and L/C in favour of the suppliers. Moreover, there is no change in business and the CC limit on the FDRs continues to be utilized for the same purposes in the assessment year under consideration. Even this issue was raised for the assessment year 2006-07, however, the AO had allowed the deduction after concluding that there was nexus between the interest earned and interest paid. In the assessment year 2008-09 i.e. subject matter of the present appeal, the assessee has earned interest of ₹ 16,97,627/- and has paid the interest of ₹ 26,10,761/-. Thus there was no net interest received by the assessee. In view of the above said discussion and in view of the fact that there is no change in the circumstances for the AY 2008-09 vis-a-vis preceding years i.e. 2006-07 & 2007-08, we therefore, extend the benefit which has been extended to the assessee by the AO for the A.Y. 2006-07 for the present assessment year also. - Decided in favour of assessee.
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