TMI Blog2020 (3) TMI 1362X X X X Extracts X X X X X X X X Extracts X X X X ..... igible undertaking to customers on credit and when there is a delay in making payment by the customers to assessee, then the assessee charged interest upon the customers which have been shown by the assessee as interest income from the customers. Therefore, according to Ld. AR since the interest income for delayed payment from the customers for the product manufactured by the assessee are to be treated as Business Income in the light of the Hon ble Supreme Court decision in Govinda Choudhury (supra), the income thus derived by the assessee from the undertaking it is eligible for deduction u/s. 80IC(2) - therefore, the AO s action of not allowing deduction is per se erroneous. We are not inclined to decide these grounds since it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erating miscellaneous income after claiming 100% deduction of the business profit of ₹ 4,17,64,799/- u/s. 80IC(2)(a)(i) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) and showed book profit of ₹ 3,82,04,075/-. The assessee company has an industrial area in Bonda, Narang, District-Kamrup, Gauhati in the state of Assam. In the said industrial area, the assessee manufactures/produces iron and steel articles/items and is admittedly entitled to get deduction u/s. 80IC(2)(a)(i) of the Act as per CBDT Notification on the subject. According to the assessee, it has been claiming the deduction since initial assessment year 2011-12 and this is the fourth year of claiming of deduction. After the case was selected for scr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place of ₹ 20,37,345/-. Since the interest income from fixed deposit cannot be having first degree nexus with the profit and gain derived from the undertaking which is eligible for deduction u/s. 80IC of the Act, we confirm the order of the Ld. CIT(A) and correct the mistake of the figures shown as ₹ 20,37,345/- in place of ₹ 5,52,844/-. And so the Revenue appeal to this extend succeeds. 5. Coming next to the disallowance of the interest earned on security deposit from the claim of deduction u/s. 80IC of the Act, according to Ld. AR, the security deposits were kept mainly with Electricity Department as security for getting electric supply required for the purpose of manufacturing of C.R. Coil. According to Ld. AR, the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss of any interest payment, assessee charges interest from the customers/sundry debtors for the delay in making payment to it. It was pointed out by the Ld. AR that as per the mandatory accounting standard and the Companies Act, the same are reported as income and expenses separately. According to Ld. AR, such interest income and interest payment are directly related to the assessee s business operation. The Ld. AR relied on the decision of the Hon ble Gauhati High Court in the case of CIT, Guwahati-II Vs. Universal Pipes (P) Ltd. (2012) 211 Taxman 420 (Gau) wherein a similar case the Hon ble High Court upheld the view of the Tribunal which held that the amount by way of interest from trade debtor has to be treated as business income and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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