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2021 (4) TMI 1197 - AT - Income TaxRectification u/s 254 - denial of deduction u/s 80-IA on interest on Income Tax refund and interest earned by the assessee on Fixed Deposits (FDs) held with the bank - HELD THAT:- We find that that the circumstances under which deposits were kept with the bank were duly noted in para 5.4 as well as in para 7 of the order. The argument that FDR would have direct nexus with assessee’s business activities and therefore, the same should be treated as part and parcel of the business activities was duly taken note of in para 7 of the order. However, the point of dispute was not the circumstances under which the deposits were held by the assessee and whether the same were part & parcel of business activities. The same is evident from the fact that Ld. AO, in all the years, had accepted interest on FDR as Business Income only. Rather the point of dispute was whether the assessee was eligible for deduction on interest on FDR within four corners of Sec. 80-IA or not. In fact, the assessee has claimed deduction u/s 80-IA even on interest on Income Tax refund which is ultimately assessed as ‘Income from Other Sources’. Therefore, the fact that FDRs were kept out of commercial expediency and the same was part and parcel of business activities was not under dispute. The assessee claimed deduction u/s 80-IA on interest on FDRs which was assessed as ‘Business Income’ and also claimed similar deduction on interest on Income Tax Refund which was assessed as ‘Income from other sources’. Therefore, the first agreement would not convince us to alter the order, in any manner. So far as the case laws are concerned, the decision of Hon’ble Apex Court in Liberty India Ltd. [2009 (8) TMI 63 - SUPREME COURT] was rendered on 31/08/2009 and it was concerned with deduction of DEPB Credit / duty drawback in the context of Sec.80-IB read with Sections 80-I and 80- IA. A principle was laid down therein that the words “derived from” is narrower connotation as compared to the words “attributable to” and by using the words “derived from”, the parliament intended to cover sources not beyond the first degree. During the course of hearing of the appeal, Ld. Sr. Counsel primarily relied upon the decision of Hon’ble Delhi High Court in CIT V/s Eltek SGS (P) Ltd.[2008 (2) TMI 17 - DELHI HIGH COURT] which was rendered on 19/02/2008 However, following Liberty India, the decision of Hon’ble Delhi High Court in Eltek SGS stood reversed by Hon’ble Apex Court on [2010 (3) TMI 1255 - SC ORDER] Therefore, the ratio of this decision rendered by Hon’ble Delhi High Court and other decisions, which followed this decision, was no longer applicable. Lastly, the two decisions of Hon’ble Rajasthan High Court and Hon’ble Madras High Court have been cited for the first time during the hearing of this application. These decisions are from non jurisdictional High Court and the same were not cited during the hearing of the appeal. Therefore, non consideration of these decisions would not make the order erroneous which would call for any interference in terms of mandate of Section 254(2). We find that the provisions of Section 254(2) have narrow application and envisage rectification of mistakes which are apparent from record. There is power to rectify but not to review the order. The arguments of Ld. Sr. Counsel, if accepted, would amount to review of the order which is impermissible.
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