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2016 (7) TMI 10 - AT - Income TaxEligibility for deduction u/s 80IAB for interest income - whether interest income was inextricably linked to the company’s business activity and therefore eligible for deduction under section 80IAB? - Held that:- On perusal of the financial statements of the assessee company the main source of income being lease income and assessee offered interest income. Further, similar interest income for the assessment year 2007-2008 was obtained. The ld. Authorised Representative could not support with explanation whether assessee has claimed deduction u/s.80IAB of the Act for the assessment year 2008-09 on interest income. We found the assessee could not substantiate the direct nexus with the industrial undertaking and we rely on decision of Supreme Court in the case of Pandian Chemicals Ltd vs. CIT [2003 (4) TMI 3 - SUPREME Court] wherein held that interest derived by the industrial undertaking of the assessee on deposits made with the Electricity Board for the supply of electricity for running the industrial undertaking could not be said to flow directly from the industrial undertaking itself and was not profits or gains derived by the undertaking for the purpose of the special deduction under section 80HH - Decided against assessee
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