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2010 (4) TMI 12 - HC - Income TaxBad Debts – Deduction u/s 80IB - In re-assessment proceedings, the Assessing Officer had disallowed the bad debts as also deduction under Section 80 IB of the Income-tax Act, 1961 - ‟) in respect of interest received from trade debtors. The Commissioner of Income-tax (Appeals) allowed the appeal filed by the assessee and held against the revenue – ITAT upheld the order if CIT(A) - The tribunal came to the conclusion that the bad debts issue had already been considered in the original proceedings under Section 143(3) and, therefore, the same could not be reopened in reassessment proceedings – in respect of deduction under Section 80 IB of the said Act, the Tribunal held that the interest income received on delayed realisation of sale proceeds took the character of sale proceeds and, after placing reliance on the decision of the Madras High court in the case of Commissioner of Income-tax v. Indomatsushita Co. Ltd: [2008 -TMI - 9851 - MADRAS High Court], held that the said interest income could be excluded from the purview of deduction under Section 80 IB of the said Act - held that - We find no infirmity in the view taken by the Tribunal on this aspect of bad debts - interest becomes part of the sale price and, therefore, would be clearly derived from the sales made and was not divorced therefrom. Consequently, it was held that such interest would be the direct result of the sale of goods and the income would definitely fall within the expression “derived from” the business of industrial undertaking as appearing in Section 80 IB of the said Act. - Decision of Supreme Court in the matter of Liberty India v. Commissioner of Income-tax: [2009 -TMI - 34471 - SUPREME COURT], followed
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