9911796707
TMI Blog2013 (1) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... after allowing set off of interest and rent can be separately assessed. 3. Because the Ld. CIT(A) has erred in law and on facts in confirming the Assessing Officer's action in rejecting the claim of deduction u/s 80IB(11) on interest of Rs.6,05,044/- received from Cultivators on advances given to them though the interest received has been assessed under the head income from business. 4. Because the advances given to cultivators is in the ordinary course of business for having surety of the business that the potato to be kept in assessee's cold storage. Thus the interest received is the part and has been derived from the main business activity. The Ld. CIT(A) has wrongly and arbitrarily confirmed the Assessing Officer's finding in rejecting the claim of deduction u/s 80IB(11) of the Act. 5. Because without prejudice to ground number 3 &4 above, the Ld. CIT(A) has wrongly and arbitrarily rejected the appellant's alternate submission that the advances to farmers has been given after taking separate loan from the bank on which interest of Rs.4,85,149/- has been paid apart from bank charges on this account amounting to Rs.51,45 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above provisions, no such deduction is permissible in respect of potato trading. Therefore, no deduction could be allowed on the profits earned on potato trading claimed by the assessee. The ld. counsel for the assessee also submitted that the assessee charged the amount from self for storage of their potatoes. Such a contention is not acceptable because no self income could be generated to the assessee after mere storage of potatoes in the cold storage. Further, no evidence is produced to prove that the assessee earned income from business of setting up and operating cold chain facility out of self trading business. Mere entries in the books of account cannot explain the nature of the claim made by the assessee. In fact, the AO has given specific finding that the assessee claimed deduction u/s. 80IB(11) on potato trading. Therefore, such a deduction cannot be allowed on the profit earned on potato trading. The claim of the assessee was, therefore, rightly rejected by the authorities below. In the absence of any evidence before us, we do not intend to interfere with the orders of the authorities below. Ground No.1, is dismissed." 5. Since the facts of the case under considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 (supra) in respect of the above ground are identical, we, therefore, find it appropriate to send the issue back to the file of A.O. with identical directions. The A.O. is directed accordingly. 9. Ground nos.3 & 4 are in respect of claim of deduction under section 80IB(11) on interest income. 10. We have heard the ld. Representatives of the parties and records perused. As per the detailed discussion made while deciding ground no.1 above, where deduction under section 80IB(11) of the Act has not been allowed in respect of profit on trading of potato. Therefore, there is no question of allowing deduction under section 80IB(11) on interest income. In the light of the said discussion, we do not find any informality in the order of CIT(A). Order of the CIT(A) is confirmed on the issue. Therefore, both the grounds i.e. ground nos.3 & 4 are decided against the assessee. 11. However, in ground no.5 the assessee made alternate submission that interest pertaining to potato trading business where deduction under section 80IB(11) has not been allowed are required to be apportioned as the assessee has taken loan separately for advances to farmers and advances for trading in potatoes. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant finding of I.T.A.T. Agra Bench is reproduced as below:- "5. We have heard the ld. Representatives of the parties and records perused. The effective ground raised in the appeal relate to disallowance under section 40(a)(ia) of the Act, therefore, all supporting grounds of appeal are decided together. The Ld. Authorised Representative submitted that the issue is covered by the decision of I.T.A.T., Special Bench Visakhapatnam wherein it has been held that section 40a(ia) of the Act is applicable in respect of amount remained payable. There is no disallowance under section 40a(ia) of the Act with respect to payment which were actually paid during the Financial Year. In respect of ground no.2, the Ld. Authorised Representative has emphasized that there was no amount payable at the end of previous year. In ground no.3, the Ld. Authorised Representative submitted that the assessee raised the issue before the CIT(A) which has not been adjudicated. The ground no.5 taken before the CIT(A) which reads as under :- "5. Because without prejudice to the grounds as mentioned above section 40a(ia) is applicable only in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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