2017 (11) TMI 1767

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....re classified by the assessee under the head 'Other income.' 3. The facts apropos this issue are that the assessee claimed deduction u/s 80IC. There is no dispute on the otherwise eligibility of deduction to the assessee. The same was also allowed by the Assessing Officer except on four items, namely, Interest on debtors amounting to Rs. 5,22,012/-; Foreign exchange fluctuation of Rs. 1,94,060/-; Interest subsidy of Rs. 2,05,500/-; and Royalty/rent received amounting to Rs. 3 lac. The ld. CIT(A) echoed the assessment order on this point. The assessee is in appeal against the denial of deduction on the above referred four items of income. 4. We have heard both the sides and perused the relevant material on record. Sub-section (1) of se....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....on debtors amounting to Rs. 5,22,012/-, it is seen as an admitted position that this amount represents interest received from debtors for late payment of sale proceeds. Debtors have obviously arisen from the eligible business of the enterprise. Such interest partakes the character of the sale proceeds to which it relates in so far as the availability of deduction is concerned. The same is, therefore, eligible for deduction as it is income derived from the sale proceeds of the eligible business. 7. Foreign exchange fluctuation of Rs. 1,94,060/- is, admittedly, on account of trading transactions. Sale is recorded at the rate of foreign exchange prevalent at the time when exports are made. If, later on, an excess amount is received due to u....