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2023 (10) TMI 906 - AT - Income TaxDeduction u/s. 80IC - Allowability of interest from FDR’s kept in four entities on account of power/electricity connection taken to run the factory, FDR against bank guarantee to Uttarakhand Environment Protection & Pollution Control Board to get permission to run the plant, FDR for opening LC for import of goods, interest recovered from customers for credit term allowed against LC and bills were discounted on which interest were also paid - HELD THAT:- As earning of interest income by the assessee when we consider the preposition render in the case of CIT vs Seshasayee Paper & Board Ltd. [1993 (8) TMI 46 - MADRAS HIGH COURT] then we clearly find that their Lordship speaking for High Court held that the interest received on deposit kept with electricity board has to be considered and should not be deducted from gross total income while computing deduction admissible u/s. 80I. In the present case the AO himself noted that the interest received by the assessee from four entities was due to FDR’s kept with electricity board, environment board, for opening LC therefore, the impugned amount of interest has to be held derived from the eligible business entitle for deduction u/s. 80IC. However, amount of Rs. 54,680/- interest received on insurance claim cannot be held as derived from eligible business thus this part is should be reduced for the claim u/s. 80IC - Accordingly, ground no. 2 of assessee is partly allowed. Disallowance of deduction claimed u/s 80IC - late filling of income tax return - non-filing of return within prescribed time limit u/s. 139(1) - HELD THAT:- As the return of income of the assessee for AY 2015- 16 was filed beyond the prescribed time limit u/s 139(1) - CIT(A) has recorded a categorical finding that the assessee was prevented by sufficient cause in filing the return within the prescribed time limit perhaps due to illness of executive partner of assessee. Even in a situation the return of income of the assessee for AY 2015-16 is treated as belated return beyond the prescribed time limit provided u/s 139(1) then also, as per the judgement of case of G.M. Knitting Industries Pvt. Ltd. [2015 (11) TMI 397 - SC ORDER] which was followed by Krushi Vibhag Karmchari Vrund Sahakari Pat Sanstha [2022 (10) TMI 348 - ITAT NAGPUR] the assessee is very well entitled to claim deduction u/s 80IC of the Act. Therefore, we reach a logical conclusion that the assessee is entitled to get deduction u/s. 80IC of the Act, as the claiming such deduction, which is part of Chapter VI-A of the Act, in the return of income filed within prescribed time limit is not mandatory but directory. Therefore Assessing Officer is directed to allow claim of assessee u/s. 80IC - Decided in favour of assessee.
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