Tribunal allows deduction under section 10A for interest income, emphasizing direct nexus with business activities.

The Tribunal allowed the appeal in favor of the assessee, permitting the deduction under section 10A for interest income amounting to Rs. 4,46,09,912. The decision was based on the direct nexus of the interest income with the assessee's business activities, following the Tribunal's consistent view in previous cases. The Tribunal emphasized the importance of considering interest income related to the business for deduction under section 10A, directing the Assessing Officer to verify the exact amount for allowance.

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Issues:
Disallowance of deduction under section 10A for interest income.

Analysis:
The appeal was against the order of the Commissioner (Appeals) regarding the disallowance of the assessee's claim of deduction under section 10A for interest income. The Assessing Officer disallowed the claim as the interest income was considered assessable under income from other sources, not derived from the business of the industrial undertaking. The Commissioner (Appeals) rejected the claim based on a previous decision against the assessee. However, the Tribunal considered the issue in light of previous judgments and allowed the deduction under section 10A for interest income.

In the previous assessment years, the Tribunal had allowed the deduction under section 10A for interest income in the assessee's own case. The Tribunal noted that the interest income had a direct nexus with and was derived from the assessee's business, making it eligible for deduction under section 10A. Following the consistent view of the Tribunal in the assessee's case, the claim for deduction under section 10A for interest income was allowed.

The Tribunal emphasized that there was no material difference in facts for the impugned assessment year and directed the Assessing Officer to verify the exact amount of interest income for allowing the deduction under section 10A. The decision was based on the principle that interest income directly related to the business activity of the assessee should be considered for deduction under section 10A. The Tribunal upheld the assessee's claim for deduction under section 10A for interest income of Rs. 4,46,09,912, as there was no substantial difference in facts presented.

In conclusion, the Tribunal allowed the appeal, pronouncing the order in favor of the assessee on 9th March 2016. The decision was based on the consistent view of the Tribunal in previous cases and the direct nexus of the interest income with the assessee's business, making it eligible for deduction under section 10A.

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