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2017 (3) TMI 731 - HC - Income TaxClaim of deduction u/s 80-IA - interest derived from security deposit - Held that:- The consistent view of the Courts has been that wherever, in such like sections, the expression “derived” is used, as against “attributable to”, the width and the amplitude is narrower. Therefore, courts have held consistently that in order to come to a conclusion as to whether such profits or gains, i.e., income, would be amenable to deduction, the effective source of such income is to be looked at. Once, it is found that the income is derived from a secondary source, which is not the effective source, it falls outside the purview of such like provisions, which provide for deductions with purpose of giving fillip to the designated activity, which, in the instant case, is the business of developing a Special Economic Zone. We may also indicate that in so far as the judgement of the Bombay High Court in CIT V. Jagdishprasad M.Joshi, [2008 (11) TMI 326 - BOMBAY HIGH COURT] is concerned, it has taken a view qua the provisions of Section 80-IA of the Act, which is contrary to the view taken by us. We are unable to persuade ourselves to agree with the view of the Bombay High Court. We are informed that the Revenue has carried the matter in appeal to the Supreme Court, and the appeal so filed stands admitted.Therefore, for the foregoing reasons, we find no infirmity in the order of the Tribunal as held Authorised Representative could not support with explanation whether assessee has claimed deduction u/s.80-IAB 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. 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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