TMI Blog2010 (11) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... passed u/s 143(3) and the other appeal numbered as ITA No.323/Vizag/2010 relates to the order passed u/s 154 of the Act. 2. The appeal numbered as ITA No.323/Vizag/2010 relating to the order passed u/s 154 of the Act is time barred by 742 days. The ld DR explained the reason for the delay in filing the said appeal. It is noticed that the Learned CIT(A) had passed a combined order against both the orders passed under section 143(3) and section 154 of the Act and the revenue initially filed a single appeal against the common order of the ld CIT (A). When the defect was pointed out by the Registry, the revenue has filed another appeal immediately thereafter and the same has resulted in a delay of 742 days. The learned Departmental Represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged in the business of construction of residential apartments. The assessee claimed deduction u/s 80IB(10) of the Act in its return of income on the interest received on bank deposits. However, the AO treated the interest received on bank deposit as income from other sources and accordingly denied deduction u/s 80IB of the Act on it. The AO also disallowed a sum of ₹ 3.50 lakhs u/s 40(a)(ia) of the Act in the original assessment passed u/s 143(3) of the Act and made disallowance under the same section of ₹ 15,26,200/- in the order passed u/s 154 of the Act. On both the disallowances, the AO denied deduction u/s 80IB(10) of the Act. In the appeal filed by the assessee, the learned CIT (A) allowed the claim of the assessee on all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned deposits, yet the interest income received from the said deposits cannot be treated as the profits derived from the business activity cited above. The law in this regard has been settled by the Hon'ble Supreme Court in the case of Sterling Food vs. CIT (1999) 237 ITR 579 (SC). It is now well settled legal proposition that when the Act uses word derived , it is not sufficient if a commercial connection is established between the income earned and the industrial undertaking. The law requires that such profits must have been derived from the industrial undertakings. In view of the foregoing discussions, we hold that the assessee is not entitled to deduction u/s 80IB(10) of the Act on the interest income earned from the Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80IB(10) should be denied on such disallowances. However, we are unable to agree with those submissions of Learned D.R. The Act provides the process of computation of income of income from business. The profit disclosed by the assessee in the Profit and Loss account is chargeable to tax as per section 28 of the Act. However, section 29 of the Act provides the manner of computation of income from Profits and Gains of business or Profession, according to which, the profit shown under section 28 is subjected to many adjustments as provided for in sections 30 to 43D of the Act. The income so arrived at after making the adjustments referred above constitutes the income taxable under the head Income from Business . Now the question that arises i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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