2012 (10) TMI 814

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....n charges, testing charges and interest income would be eligible for deduction under Section 80 IB? 2. Whether on the facts and circumstances of the case, the ld. CIT(A) was correct in deciding the facts and in the circumstances of the case, the ld.CIT(A) was correct in deciding the case in favour of the assessee relying only on sub section 1 of section 80 IB which has focused only on the expression "profits and gains derived from industrial undertaking..." and erred in acknowledging sub section 2 (iii) to s.80 IB which reveals that it is mandatory that the deduction is available to only that industrial undertaking which manufactures or produces any article or thing in other words, the deduction is available only to eligible industrial und....

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....ncome the First Appellate Authority held that in case of interest on delayed payments from customers, the assessee is eligible for deduction under Section 80 IB of the Income Tax Act, 1961. On interest received on fixed deposits kept with the bank, he held against the assessee. The Revenue filed an appeal against the claims allowed by the Commissioner of Income Tax (Appeals) and the assessee filed a Cross Objection on the issue of disallowance of exemption under Section 80 IB of the Income Tax Act, 1961 on interest income from Fixed Deposits. Alternate contention is raised that only net income from interest should have been excluded. 3. We have heard Mr.Aroop Kumar Singh the ld.D.R. on behalf of the Revenue and Mr.Ved Jain, the Ld.Counsel ....

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....ated above. This decision is in line with the propositions laid down by the Jurisdictional High Court in the case of CIT vs. Northern Aromatics Ltd. 196 CPR (Delhi) 479, which is also followed in the case of CIT vs. Sadhu 336 ITR 444 (Delhi). Respectfully following the same on the facts of the present case, we uphold the order of the First Appellate Authority and dismiss ground nos. 1 to 3 of the Revenue. 6. Coming to ground no.4, we hold that the interest received by the assessee from customers for delayed payments, is eligible for deduction under Section 80 IB of the Income Tax Act, 1961 by applying the decision of the Hon'ble Delhi High Court in the case of CIT vs. Advance Detergents Ltd. 339 ITR 81 (Delhi), wherein the Hon'ble Court fo....