Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (12) TMI 451 - AT - Income TaxExemption u/s.10B - “profit derived from export of articles or things etc.” - Held that:- The assessee is eligible for deduction u/s.10B of the Act on miscellaneous items of income which are in the nature of “business income” attributable to exports of articles or things, etc. As a corollary, we find that receipts towards “sales tax refund” and amount of “sundry balance written off” are in the nature of business income in the earlier year and the Assessee is eligible for relief contemplated under S.10B(1) read with section 10B(4) of the Act. For the parity of reasoning, we direct the AO to admit the claim of the assessee towards sales tax refund and sundry balance written off for the purpose of computation of deduction under S.10B of the Act. For the purpose of computation of deduction of formula provided by section 10B(4) of the Act, the “interest income” cannot be included within the pale of “business profits” which is clearly in the nature of “income from other sources” in the instant case. Therefore, order of the CIT(A) to this extent cannot be said to be erroneous in the facts of the case. It would be pertinent to notice here that in the earlier AY 2007-08, the interest income has been accepted for the purpose of deduction u/s.10B of the Act purportedly on the premise that AO has mainly relied upon the decision of the Hon’ble Apex Court in the case of Liberty India (2009 (8) TMI 63 - SUPREME COURT ) which was distinguished by the Tribunal on facts. As against this, in the assessment year in appeal, the AO has rejected the interest claim on the ground that the income arising from Bank deposits are in the nature of “income from other sources” and not business income with which we fully agree. Hence, we find no infirmity in the order of CIT(A) for denial of deduction under S.10B of the Act towards interest income. As regards insurance refund we note that CIT(A) has granted partial relief to the extent of 75% of the insurance claim received holding the same to be akin to business income and rejected balance 25% of the insurance claim so received towards capital loss. Relevant facts are necessary to understand as to whether the impugned “insurance receipts” are in the name of “business income” or not. Therefore, it would be in the fitness of things to restore the issue back to the file of AO for ascertaining the relevant facts and determine the issue afresh in accordance law. Needless to say that AO shall grant adequate opportunity of hearing to the assessee while determining the issue of eligibility of deduction on this score.
|