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2020 (3) TMI 1362 - AT - Income TaxDeduction u/s 80IC - treating interest income from bank, from customers, from security deposit relates to business activities - HELD THAT:- Hon’ble Apex Court in CIT Vs. Govinda Choudhury [1992 (4) TMI 8 - SUPREME COURT] wherein the Hon’ble Apex Court held that the interest awarded to the assessee therein in an arbitration proceeding for delayed payment in a contract executed by the assessee was to be recorded as business income and could not be treated as ‘income from other sources’ and upheld the action of the Tribunal. According to Ld. AR in the present case, the assessee had sold the C. R. coil manufactured from its eligible undertaking to customers on credit and when there is a delay in making payment by the customers to assessee, then the assessee charged interest upon the customers which have been shown by the assessee as interest income from the customers. Therefore, according to Ld. AR since the interest income for delayed payment from the customers for the product manufactured by the assessee are to be treated as Business Income in the light of the Hon’ble Supreme Court decision in Govinda Choudhury (supra), the income thus derived by the assessee from the undertaking it is eligible for deduction u/s. 80IC(2) - therefore, the AO’s action of not allowing deduction is per se erroneous. We are not inclined to decide these grounds since it is noted that the Ld. CIT(A) has not adjudicated the issues relating to two issues i.e. deduction in respect of income from delayed payment from customers and interest on security deposit (electricity), therefore, both these issues are set aside back to the file of the Ld. CIT(A) for fresh adjudication with a direction to decide the issues in accordance to law after hearing the assessee and without being influenced by any observation made by us supra.
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