TaxTMI 
TaxTMI 
TaxTMI 
2015 (11) TMI 67
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....or years. 1.2 That on the facts and circumstances of the case and in law, the learned CIT-A has erred in denying the set-off of brought forward unabsorbed depreciation of Rs. 36,70,496/- against interest income of Rs. 7,91,145/- on the inter corporate deposits earned by the Appellant during the subject year. 2. That on the facts and circumstances of the case and in law, the learned CIT-A has erred in upholding the order of the assessing officer, wherein the assessing officer has held that the interest of Rs. 2,45,479/- earned by the Appellant on Fixed deposits with banks constitutes "income from other sources" and hence chargeable to income-tax under section 56 (I) of the Act. Consequently, the learned CIT(A) has also erred in upholding the order of the assessing officer in not allowing deduction under section l0A of the Act on above interest on fixed deposits. 3. That on the facts and in law the learned assessing officer has erred on facts and in law in levying interest under section 234B of the Act amounting to Rs. 1,15,146/-." 2. Briefly stated, the facts of this case are that during the processing of income tax return filed by the assessee for the Assessment Year 200....
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....ction u/s 10A of the Act in respect of profits derived by the eligible undertaking would be computed after set off of brought forward unabsorbed depreciation of Rs. 36,70,496/- from prior service; that Ld. CIT(A) has erred in denying the set off of brought forward of unabsorbed depreciation of Rs. 36,70,496/- against interest income of Rs. 7,91,145/- on the inter corporate deposits earned by the appellant and relied upon the judgement cited as CIT Vs Yokogawa India Ltd. 341 ITR 385 (Kar.) and CIT Vs TEI Technologies Pvt. Ltd. 361 ITR 36 (Del.); that the surplus funds generated from business operation were kept as short term deposits on which interest of Rs. 2,45,479/- was earned which the appellant has treated as business income, however, the same was assessed as income from other sources and relied upon the judgements cited as Deepak Pandurang Gadre vs DCIT in I.T.A. No. 225/PN/07 dt. 31.01.2011 and ITO Vs M/s. Greytrix (India) Pvt. Ltd. I.T.A. No. 5787/Mum/2009 dated 07.10.2011. 7. On the other hand, Ld. D.R. reiterated the arguments addressed before Ld. CIT(A), relied upon the impugned order and contended that since interest income has not been derived from export activities, t....
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.... has to be understood in the context with which the said provision is inserted in Chapter - III of the Act. Sub-section (4) of section 10A clarifies this position. It provides that the profits derived from export of articles or things from computer software shall be the amount which bears to the profits of the business of the undertaking, the same proportion as the export turnover in respect of such articles or things or computer software bears to the total turnover of the business carried on by the undertaking. Therefore, it is clear that though the assessee may be having more than one undertaking for the purpose of section 10A it is the profit derived from export of articles or things or computer software from the business of the undertaking alone that has to be taken into consideration and such profit is not to be included in the total income of the assessee. The provisions of this sub-section will apply even in the case where an assessee has opted out of section 10A by exercising his option under sub-section (8). It is permissible for an assessee to opt in and opt out of section 10A. In the year when the assessee has opted out, the normal provisions of the Act would apply. The ....
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....rate deposit earned by the appellant during the subject year is consequential. Resultantly, grounds No.1.1 and 1.2 are determined in favour of the assessee. Ld. D.R. has fairly conceded the principles laid down in the judgements cited above. 10. Regarding ground No.2, Ld. A.R. contended that the interest of Rs. 2,45,479/- earned by the assessee from the surplus funds generated from business operation kept as short term deposits are not chargeable to the income tax u/s 56(1) of the Act rather the same are allowed to be deducted u/s 10A of the Act and relied upon the judgements cited as Deepak Pandurang Gadre Vs DCIT I.T.A.No. 225/Mum/2007 and ITO Vs M/s. Greytrix (India) Pvt. Ltd. I.T.A.No. 5787/Mum/2009. However, the judgements (supra), relied upon by the Ld. A.R. are inapplicable to the facts and circumstances of the case being on distinguishable facts and in the face of law laid down by Hon'ble Apex Court in the judgements cited as Pandian Chemicals Ltd. Vs CIT (supra) and CIT Vs Menon Impex Pvt. Ltd. (supra). 10.1 The Hon'ble Apex Court in Pandian Chemicals Ltd. (supra) also held that in the case of industrial undertaking "the interest derived by the industrial underta....