2011 (5) TMI 965

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....search and development services to the customers in order to assist them in designing and developing software products. The assessee is a 100% export oriented unit and is a member of Software Technology Part of India. The assessee claimed deduction u/s 10B amounting to Rs. 6,51,01,058/- which is more than the income of the year, hence income has been reduced to NIL. The assessee challenged the action of the Assessing Officer in holding that the assessee was not eligible for claiming deduction u/s 10B of the Act in respect of the following incomes. "Interest Rs. 22,36,437 Foreign exchange gain (net) Rs. 6,98,838/- Miscellaneous income Rs. 36,135/- Prior period income Rs. 2,840/-   Rs. 29,74,250/-   ....

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....l in assessee's own case in ITA No. 135/PN/2006 and 1374/PN/2006 for A.Y. 2003-04 wherein it has been held as under: "4. Heard the submissions of both the sides. At the outset, it is pertinent to mention that now this issue is very well settled after elaborate discussion by the several courts. Before we cite all these decisions, it is worth to examine the nature of interest income which was under the following heads: i) Interest received on FD kept for custom bonding of Rs. 3,45,484/- ii) Interest received on Money Flex Deposit of Rs. 12,80,444/- iii) Interest received from MSEB deposit of Rs. 1,05,957/- iv) Interest received on short term FDs of Rs. 1,29,241/- 5. In respect of first item i.e. interest on FD kept for custo....

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.... EEFC account was held as close nexus with the business activity of the assessee. 6.1 As far as eligibility of interest received from MSEB deposit is concerned, in our considered opinion, the same is covered in favour of the revenue by the respected Supreme Court decision in the case of Pandiyan Chemicals Ltd. (262 ITR 278) wherein it was held that interest derived by the industrial undertaking of the assessee on deposit with the Electricity Board for the supply of electricity for running an industrial undertaking could not be said to be a direct flow from the industrial undertaking itself, hence held that such interest was not profits and gains derived by the undertaking Therefore, this ground deserves to be dismissed. We therefore, hol....