Tax Management India. Com
                            Law and Practice: A Digital eBook ...
TMI - Tax Management India. Com
Case Laws Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Manuals SMS News Articles
Highlights
        Home        
 
Extracts
Home List
← Previous Next →

2016 (7) TMI 920

Interest income treated as part of the profits of business of the 100% E.O.U. eligible for deduction under Section 10B - Held that:- Total turnover shall naturally include receipt on account of interest. The legislature does not appear to have provided for excluding the amount of interest from the total turn over as has been done in the case of 80HHC by explanation (baa) of sub-section (4C) thereof. In that case, 90% of the income arising out of interest has to be excluded from the profits of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

business income and has in fact been so assessed. It is not in dispute that the surplus funds were of the 100% EOU. As such, the interest earned thereon has to be regarded as part of the “profit of the business of the undertaking. Tribunal was correct in directing the Assessing Officer to treat the interest income as part of the profits of business of the 100% E.O.U. eligible for deduction under Section 10B and compute deduction accordingly - Decided in favour of assessee - ITA 666 of 2008, GA .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ncome Tax Appellate Tribunal erred in law in directing the Assessing Officer to treat the interest income of ₹ 28,74,473/- as part of the profits of business of the 100% E.O.U. eligible for deduction under Section 10B of the Income Tax Act, 1961 and compute deduction accordingly without appreciating the fact that the said interest income was not profit from the business but accrued on fixed deposit kept by the assessee in bank ? (b) Whether on the facts and in the circumstances of the case .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

for the revenue submitted that he is not pressing the same. Therefore, we are only concerned with the question no. 1. In order to answer the question, we have to consider subsection (1) and subsection (4) of Section 10B of the IT Act, 1961, in so far as the same is material for our purpose, which provide as follows : 10B. (1) Subject to the provisions of this section, a deduction of such profits and gains as are derived by a hundred per cent exportoriented undertaking from the export of articles .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to the provisions contained in the other parts of the Section 10B, the benefit is available to an assessee. It was not disputed that the only relevant provision to be taken into account is subsection (4) which we already have quoted. Sub-section (4) provides the quantum of deduction which can be availed by an assessee. The quantum of deduction is dependent upon the total turnover of the business of the undertaking and the export turnover of the undertaking. Once these two figures are available, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

-section (4C) thereof. In that case, 90% of the income arising out of interest has to be excluded from the profits of the business for the purpose of arriving at deduction available under Section 80HHC. But an identical provision is not there. Therefore, that provision cannot be imported by implication. The submission that the amount earned from interest was not intended to be taken into account for the purpose of giving benefit under subsection (1) of Section 10B may be correct. But the amount .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o be construed as income of the business of the undertaking. There is a direct nexus between this income and the income of the business of the undertaking. Though it does not partake the character of a profits and gains from the sale of an article, it is the income which is derived from the consideration realized by export of articles. In view of the definition of income from Profits and Gains incorporated in Subsection (4), the assessee is entitled to the benefit of exemption of the said amount .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rd and on staff advances does not have direct or immediate nexus with the business of the assessee s undertaking and, consequently, they are not eligible for grant of deduction under Section 10B of the Act, which is akin to Section 80HH of the Act dealt with in the decision referred supra. Mr. R.N.Bajoria, Learned senior advocate rightly pointed out that the judgment of the Madras High Court is of no relevance for the simple reason that sub-section (4) of Section 10B was not taken into account b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s noted and after considering the judgments of the Hon ble Supreme Court in Sterling Foods (supra) and in P.R.Prabhakar versus CIT (284 ITR 548 (SC) ) approving the Special Bench decision of the Tribunal in International Research Park Laboratories Limited versus Assistant C.I.T. (212 ITR (AT) 1 (SB) ), it was held that the profits of the business of the undertaking would include its entire business income. Keeping in view the above decision and the decision of the Tribunal, we are of the conside .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.