TMI Blog2017 (11) TMI 1767X X X X Extracts X X X X X X X X Extracts X X X X ..... nge fluctuation is, admittedly, on account of trading transactions. Sale is recorded at the rate of foreign exchange prevalent at the time when exports are made. If, later on, an excess amount is received due to upward revision of foreign exchange rate, such excess amount is nothing, but, part of sale proceeds only, which was earlier recorded at a lower rate in accordance with the foreign exchange rate prevalent at the material time. Thus, foreign exchange fluctuation is very much an item of income derived by the assessee from the business of eligible undertaking. The same is, ergo, held to be eligible for deduction. Interest subsidy - Nature of income as contended by the assessee before the CIT(A) is that it paid interest on loans taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as ‘Profits and gains derived by an enterprise from any business’ referred to in sub-section (2). Rental income has no relation with the eligible business. The view of the authorities on this issue is also upheld. - ITA No.442/Del/2014 - - - Dated:- 15-11-2017 - SHRI R.S. SYAL, VICE PRESIDENT AND SMT BEENA PILLAI, JUDICIAL MEMBER For the Appellant : Shri Akhilesh Kumar, Advocate For the Respondent : Shri Atiq Ahmed, Sr. DR ORDER PER R.S. SYAL, VP: This appeal filed by the assessee is directed against the order passed by the CIT(A) on 21.11.2013 in relation to the assessment year 2009-10 2. The only issue raised in this appeal is against the denial of deduction u/s 80IC in respect of four items of income to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is different from certain other sections which provide for deduction only in respect of profits and gains derived from an industrial undertaking. The essence of section 80IC is that deduction is allowable on profits and gains derived by an enterprise from any eligible business. Such profits and gains from the eligible business do not refer only to the income directly derived from the undertaking. Income from business as referred to in the provision encompasses any income emanating from the business carried on by the enterprise. Such income need not necessarily be directly derived from the undertaking. So long as the nexus between the income and the business exists, the income continues to be eligible for deduction u/s 80IC. 6. Coming t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In support of deduction, the ld. AR relied on Circular No.39/2016 which takes cognizance of the Hon'ble Supreme Court judgment in Meghalaya Steels Ltd. (2016) 383 ITR 217 (SC) and provides that the subsidy of transport, power and interest given by the government to the industrial undertakings are receipts which have been reimbursed for elements of costs relating to manufacture/sale of products and, accordingly, deduction should be allowed on them. In our considered opinion, this Circular does not advance the case of the assessee because it seeks to provide for deduction in respect of subsidies which go to reimbursement of cost in the production of particular business. When we advert to the facts of the instant case, it is found that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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