TMI Blog2018 (6) TMI 1779X X X X Extracts X X X X X X X X Extracts X X X X ..... entitle to deduction. The decision of the Apex Court is applicable in the present case which also considered the decision relied by the Ld. AR i.e. Pandian Chemicals [ 1997 (4) TMI 38 - MADRAS HIGH COURT] . The decision relied upon by the Ld. AR are factually different and are not applicable in the present case while the decision of the Apex Court passed in Conventional Fastners is more apt in the present case. Therefore, the order of the CIT(A) is set aside and appeal of the Revenue is allowed. - ITA No. 205/DEL/2013 - - - Dated:- 5-6-2018 - Shri N. K. Saini, Accountant Member And Ms. Suchitra Kamble, Judicial Member For the Appellant : Sh. Kaushlendra Tiwari, Sr. DR. For the Respondent : Sh. V. V. Kale, CA. ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm of interest miscellaneous income of ₹ 49,25,706/-. The Assessing Officer held that in view of the ratio of the decisions and particularly of the Hon ble Madras High Court decision in the case of Pandian Chemicals Ltd (in which SLP rejected), and of ITAT, Pune Bench in the case of Kirpa Chemicals (P) Ltd. Vs. Deputy Commissioner of Income-tax' (88 ITD 200), the interest income and miscellaneous Income cannot be held to be derived from the business of providing infrastructural facilities as there is no direct nexus between the interest earned arid the business of providing infrastructural facilities. The Assessing Officer further observed that income can be said to be derived from an activity if the said activity is immediate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n case of Conventional Fastners Vs. CIT 2018-TIOL- 2002-SC- IT Judgment dated 16th May 2018. The Ld. DR submitted that the Hon'ble Supreme Court in this particular case held that the interest has to be taxed under the head income from business and profession , but deduction u/s 80IC is not allowable. 7. The Ld. AR submitted that the Hon ble Apex Court decision is not applicable in the assessee s case because the assessee is undertaken government infrastructure projects and as per the requirements of projects the assessee is duty bound to give bank guarantee which is a pre-condition for undertaking any activities and processing of any payment against such work. This results, into requirement of the bank to compulsory make some FDR. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances of bank guarantee for carrying on the business for providing performance guarantee. The Hon'ble Supreme Court in case of Conventional Fastners vs. CIT (supra) made it clear that interest earned on fixed deposit maintained with bank for obtaining bank guarantee is not derived from business, hence not entitle to deduction. The decision of the Apex Court is applicable in the present case which also considered the decision relied by the Ld. AR i.e. Pandian Chemicals. The decision relied upon by the Ld. AR are factually different and are not applicable in the present case while the decision of the Apex Court passed on 16.05.2018 (Conventional Fastners) is more apt in the present case. Therefore, the order of the CIT(A) is set aside and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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