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2017 (5) TMI 1595 - HC - Income TaxItems of income not to be included whilst computing the profits derived from the business of the Gadepan I unit and were not eligible for a deduction under section 80IA - Held that:- Taking into consideration the decision of the Supreme Court in ACG Associated Capsules Pvt. Ltd. (2012 (2) TMI 101 - SUPREME COURT OF INDIA), issue No.1 is answered in favour of assessee inasmuch as deposit which he has clubbed was statutory mandatory requirements against the Fixed Deposit receipt. In that view of the matter, if there is a breach of condition of 10% will invite action. In that view of the matter, it was mandatory requirement under the Act Compensation received on the machinery break down in view of decision in CIT vs. Metalman Auto (P.) Ltd. (2011 (2) TMI 330 - PUNJAB AND HARYANA HIGH COURT) it is squarely covered and issue is decided in favour of assessee against the department. Expenses should be written back 37,40,951/-, in our considered opinion, the issue is required to be answered in favour of Department and against the assessee in view of the fact that this will not form a part of income since it was written off deposit which was kept in separate account. This is not an income derived. The issue is decided in favour of Department and against the assessee. For issue on recovery of rent as relied upon decisions reported in Commissioner of Income Tax vs. Indo Swiss Jewels Ltd. and Anr. (2005 (9) TMI 47 - BOMBAY HIGH COURT) as held it is clear that the inter-corporate deposits were made by the assessee from the surplus funds that were set apart for the payment of imported machinery. That the said deposits were withdrawn and payment was made towards import of the machinery is also not questioned by the Revenue. The interest earned on the short-term deposits of the money kept apart for the purpose of business has to be treated as income earned on business and cannot be treated as income from other sources.
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