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2015 (11) TMI 1139 - HC - Income TaxDeduction under Section 10B - ITAT not accepting the Assessee’s plea in regard to ‘customer claims’ ‘freight subsidy’ and ‘interest on fixed deposit receipts’ even while it accepted the Assessee’s case as regards ‘deemed export drawback’ qualifying for exemption - Held that:- Considering the contention of the Assessee as regards customer claims was that it had received the claim of ₹ 28,27,224 from a customer for cancelling the export order. Later on the cancelled order was completed and goods were exported to another customer. The sum received as claim from the customer was non-severable from the income of the business of the undertaking. The Court fails to appreciate as to how the ITAT could have held that this transaction did not arise from the business of the export of goods. Even as regards freight subsidy, the Assessee’s contention was that it had received the subsidy in respect of the business carried on and the said subsidy was part of the profit of the business of the undertaking. If the ITAT was prepared to consider the deemed export draw back as eligible for deduction then there was no justification for excluding the freight subsidy. Even as regards the interest on FDR, the Court has been shown a note of the balance sheet of the Assessee which clearly states that “fixed deposit receipts (including accrued interest) valuing ₹ 15,05,875 are under lien with Bank of India for facilitating the letter of credit and bank guarantee facilities.” In terms of the ratio of the decisions of this Court both in Hritnik Exports (2015 (10) TMI 1009 - DELHI HIGH COURT) and Universal Precision Screws (2015 (10) TMI 951 - DELHI HIGH COURT), the interest earned on such FDR ought to qualify for deduction under Section 10B of the Act. - Decided in favour of the Assessee.
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