TMI Blog2012 (9) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... S HIGH COURT] wherein the deduction u/s 10A was allowed. In the case of Commissioner of Income Tax vs. Sterling Foods [1999 (4) TMI 1 - SUPREME COURT] it was held that the mere fact that the deposit was made for obtaining Letter of Credit which Letter was, in turn, used for the purpose of business undertaking did not establish a direct nexus between the interest and industrial undertaking. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xport Oriented Unit, which develops and exports software. It earns foreign exchange. It has earned interest income amounting to Rs.92,06,602/- on Foreign Currency Deposit Account permitted by FERA under Banking Regulations. The assessee was asked to explain why the said sum should not be assessed under the Head `Other Sources' in Section 56 of the Income Tax Act, 1961 ['Act', for short]. This quer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In that case, the Madras High Court examined in detail the transaction in question and found that the assessee had set up a new industrial undertaking in Kandla Free Trade zone for manufacturing light engineering goods. The goods therein were exported during the Assessment Year 1985-1986. In the course of business, the assessee was required to open a Letter of Credit. On such Deposit, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside the impugned judgment and remit the cases to the Income Tax Appellate Tribunal ['ITAT', for short] for deciding the matter afresh after examining the transaction in question, as done by the Madras High Court in the case of Menon Impex Private Limited [supra]. Needless to state that ITAT will give an opportunity to the assessee to produce relevant documents in support of the transaction in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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