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2016 (6) TMI 524 - ITAT KOLKATA

2016 (6) TMI 524 - ITAT KOLKATA - TMI - Eligibility of deduction u/s.80IB - interest receivable on trading - Held that:- Interest receivable on trading should also be treated as part of business profit on which deduction u/s 80IB has to be allowed. See CIT vs Vidyut Corporation [2010 (4) TMI 229 - BOMBAY HIGH COURT] and CIT vs Pratham Developers(2013 (8) TMI 112 - GUJARAT HIGH COURT ) - Decided in favour of assessee - ITA No. 2408/Kol/2013 - Dated:- 13-5-2016 - Shri N. V. Vasudevan, JM And Shri .....

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88/- being interest from debtor in calculating deduction u/s 80IB of the Act, without appreciating that the income from interest is not an income directly connected to the industrial operation. 2. In doing so, the Ld. CIT(A) has erred in not appreciating the ratio of the decisions of the Hon ble Supreme Court in the case of CIT vs Sterling Foods reported in 237 ITR 579 and Pandian Chemicals Ltd. Vs CIT reported in 262 ITR 278. 3. The Assessee is a company engaged in the business of manufacturing .....

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s also taken into account as business income of the industrial unit eligible for claiming deduction u/s 80IB. The AO held that amount of interest received was ₹ 77,41,640/- (of the Faridabad Unit) should be deducted from the profit of the Faridabad Unit for calculating eligible profit for claiming deduction u/s 80IB because it cannot be construed as profits of the business of manufacture on which alone deduction u/s.80IB of the Act was allowable. The Assessee had on its own excluded intere .....

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CIT(A). CIT(A) found that the ITAT had allowed similar claim of the Assesee allowed the claim of the assessee in AY 2000-01 & 2001-02 by observing as follows :- 6. After hearing both the parties and going through the decisions cited by the assesee, we are of the considered view that the deductions of ₹ 10,96,258/- for A.Y. 2000-01, ₹ 27,92,269/- for A.Y. 2001-02 and .29,89,861/- for A.V. 2003-04 made out of the total income to calculate deduction u/s 80lB are not justified and no .....

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other words, the appellant company is entitled for deduction u/s 801B on the interest received from the trade debtors. For A.Y. 2006-07, the appeal of the assessee company was decided by the CIT(A), Central - II,. Kolkata vide Appeal No. 189/CC- XII/CIT(A)-Cent-II/KoIj08-09 dated 30.10.2009. In the said appeal, the CIT(A) relying on the decision of his predecessor for A.Y. 2005-06 in Appeal No. 289/CC-XII/CIT(A)/C-II/06-07 dated 29.01.2008, directed the AO to include the amount of ₹ 42,55, .....

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