2015 (2) TMI 811

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....l was right in holding that the assessing officer was justified in rectifying the intimation under Section 143(1) of the Act by resorting to provisions of Section 154 of the Act? (ii)Whether the Tribunal was right in law in holding that the question of admissibility of deduction of interest income under Section 10B of the Act is a mistake apparent from the face of the record and hence the intimation under Section 153(1) can be rectified in a proceeding under Section 154 of the Act? 2.1. The facts in a nutshell are as under: The appellant/assessee is engaged in the business of manufacturing and export of electronic battery charges and sub-assemblies and its profits are exempt under Section 10B of the Income Tax Act. For the assessment year....

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....d the appeal of the Revenue and held as under: "3. We have heard the rival submissions in the light of material placed before us and precedents relied upon. Return filed by the assessee was processed under section 143(1). Subsequently, it was found by the A.O. that assessee had interest income of Rs. 11,27,629/- from deposits with Corporation Bank and assessee did recover interest from staff of loans given. On that basis it was concluded that since the interest income is not derived from the business of the undertaking, the same is not eligible for exemption under Section 10B. Ex consequenti, eligible deduction under Section 10B was reduced pro tanto by resorting to the provisions of section 154. 4. As per the mandate of section 10B any p....

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....3] 262 ITR 278 SC, wherein it is held as under: "It is clear, therefore, that the word 'derived from' in section 80HH of the Income-tax Act, 1961, must be understood as something which has direct or immediate nexus with the appellant's industrial undertaking. Although electricity may be required for the purposes of the industrial under-taking, the deposit required for its supply is a step removed from the business of the industrial undertaking. The derivation of profits on the deposit made with Electricity Board cannot be said to flow directly from the industrial undertaking itself. The learned counsel appearing on behalf of the appellant has referred to several decisions of the Madras High Court in order to contend that the wo....

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....o Section 80HH of the Act dealt with in the decision referred supra. 7. That apart, the Tribunal rightly relied upon a decision of this Court in Southern Industrial Corporation Ltd. v. Commissioner of Income Tax, (2002) 258 ITR 481 (Mad), wherein it is held that a rectification to give effect to the law laid down by the Supreme Court is valid. The relevant portion of the said decision is extracted hereunder: "When a statutory provision is interpreted by the Supreme Court in a manner different from the interpretation made in the earlier decisions of a smaller Bench, the order which does not conform to the law laid down by the larger Bench in the later decision which decision would constitute the law of the land and is to be regarded as the....