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2021 (3) TMI 1248 - AT - Income TaxDeduction u/s 80IC - interest income from fixed deposit - According to the assessee, even if the interest income from Fixed Deposit does not qualify for the deduction u/s 80IC, still it being a business receipt should be given the benefit of netting - HELD THAT:- We note that in the revenue appeal for the same assessment year i.e. AY 2014-15 [2020 (3) TMI 1362 - ITAT KOLKATA] we have confirmed the action of Ld. CIT(A) in respect of claim of the assessee in respect of interest income as not eligible for deduction u/s 80IC. Netting of interest income was not before us, because the revenue appeal came up without this assessee’s cross-appeal. And since this issue has come to our notice only in this appeal, in the interest of justice and fair play and as per settled principle of law, we are of the opinion that the net interest should only be brought to tax. Needless to say, the assessee in this case has claimed to have made the FDs for the purpose of procuring bank guarantee which was a condition precedent for procurement of raw material from M/s SAIL. And therefore, according to us, the interest income even if it does not qualify for deduction u/s 80IC of the Act being not having first degree nexus, still the nature of the receipt since being business in nature and not from other sources [refer CIT vs. Nirma Ltd.[2014 (10) TMI 388 - GUJARAT HIGH COURT] needs to be treated as business receipt, if the facts are correct, which may be verified by the CIT(A), since we have restored certain issues back to him, while adjudicating the Revenue Appeal for this assessment year. And if the contention of the assessee is found to be correct, then netting should be allowed to their interest receipt as held by the Hon’ble Gujrat High Court in the case of CIT vs. Nirma Ltd. [2014 (10) TMI 388 - GUJARAT HIGH COURT]. Therefore we restore this issue back to the file of the Ld. CIT(A). Appeal of the assessee is allowed for statistical purposes.
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