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TMI Blog2020 (5) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... see's claim for deduction under section 80IB(10) of the Income Tax Act, 1961 in respect of interest received amounting to Rs. 11,10,810/- and other income amounting to Rs. 6,36,746/-. 3. The assessee in the present case is a Company, which is engaged in the business of Builders and Property Developers. The return of income for the year under consideration was filed by it on 17.09.2011 declaring total income at 'NIL'. During the year under consideration, the assessee-company had developed a housing project namely "Salarpuria Symphony" in Bangalore, Karnataka and the entire profit of the said project was claimed to be exempt under section 80IB(10) of the Act. During the course of assessment proceedings, it was noticed by the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 80IB(10). If this well settled test is applied in the present case, I find that the interest of Rs. 11,10,810/- earned by the assessee during the year under consideration on Bank deposits etc. cannot be held to be eligible for deduction under section 80IB(10) as the immediate source of the said interest income was not the business of the assessee of developing housing project and it was the investment made by the assessee in Bank deposits, etc. As regards the other income amounting to Rs. 6,36,476/-, the details of which are placed at page no. 7 of the assessee's paper book, I find that the income by way of transfer fees received by the assessee for Apartment Booking amounting to Rs. 4,10,892/- and interest received for delay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deducted for determining the profits of the business eligible for deduction. Keeping in view the said decision of the Hon'ble Supreme Court, I direct the assessing Officer to verify the amount of net interest keeping in view the direct nexus theory and allow appropriate relief to the assessee on this issue. Ground No. 2 of the assessee's appeal is accordingly treated as allowed. 6. As regards the issue involved in Ground No. 3 relating to the disallowance of Rs. 17,765/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) under section 43B on account of ESI payable, it is observed that the ESI shown as payable amounting to Rs. 17,765/- was disallowed by the Assessing Officer under section 43B of the Act as the assessee fai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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