2014 (8) TMI 946

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....he Coir Development Directorate as Market Development Allowance. for advertisement, starting new showrooms, development of existing showrooms, market study, computerization, construction of godowns and for giving attractive discounts to develop new market techniques etc. This grant was credited to P&L A/c by the assessee as income and shown under the head income from other sources. 3. The Ld. AR submitted that this amount is directly linked to the business carried on by the assessee and this has to be considered as income from business so as to grant deduction u/s. 80P of the Act . According to the Ld. AR the grant received from the Coir Development Directorate as Market Development Allowance is business income and this was the subject mat....

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....ter before the Hon'ble Supreme Court and the Hon'ble Supreme Court after considering the entire issue, held that the subsidies received from the Government are to be treated as business income of the assessee and is entitled for deduction under section 80P(2)(a)(i) of the I.T. Act. In view of the above judgment of the Hon'ble Supreme Court in the case of Ramanathapuram District Co-op Central Bank Ltd. (supra), we are inclined to decide the issue in favour of the assessee. This ground of the assessee is allowed. 6. The next ground in this appeal is with regard to disallowance of claim for deduction u/s. 80P(2)(d) of the I.T. Act on the reason that the assessee has received interest from the co-operative bank and not the co-opera....