TaxTMI 
TaxTMI 
2018 (2) TMI 1873
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....15Jb of the Act. 5. During the course of assessment the AO observed that the assessee had claimed deduction u/s 10AA of the Act on profit from Airoli Unit which included interest income of Rs. 25,02,849/-. The AO was of the view that the interest income included in the profit on which the assessee had computed the deduction u/s 10AA of the Act were not derived from the services/export activity and hence deduction on the same was not allowable. The AO thereby asked the assessee to explain as to why the deduction claimed should not be recomputed after excluding the interest income. In response the assessee filed its written submission contending that the interest income on FDR were related to its business activity and eligible for deduction u/s 10AA of the Act. However, the AO found the submission of the assessee unacceptable. The AO was of the view that these receipts were not derived from the export activity and hence were not eligible for deduction u/s 10AA of the Act. Accordingly, the AO reduced the business income of the assessee by Rs. 25,02,849/- and added to the total income under the head income from other sources. 6. By the impugned order, CIT(A) directed the AO to al....
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....has entered into Forward contract with ICICI Bank for hedging its Export Proceeds to vulnerable exposure of Currency Risk and to hedge the Exchange Rate. Vie transaction of forward contract entered into by the Appellant was done with the object of protecting the export business of the Appellant from the exchange fluctuation risk and it has a direct nexus to the export business of the Appellant. The lodging income was not derived from any scheme framed by the government but had a direct proximate nexus with the export business of the Appellant. Accordingly I hold that the hedging income is 'derived from' the export business of the Appellant and 'same shall be assessed under the head 'income from business' and shall be considered for deduction u/s 10B of the Act as against assessment made by the AO under the head 'income from other sources'. Accordingly I direct, the AO to assess the income aggregating to Rs. 29,13,512/- as business income of the Appellant and considered the same while allowing deduction u/s WB of the Act. This ground of appeal is accordingly allowed." There is neither any factual or legal change in the present case of the appellant. ....
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....the assessee as a safeguard against exchange rate fluctuation, that hedging is directly related to export business of the assessee, that the interest earned had direct link with the export business. He directed the AO to consider the amount in question eligible for deduction u/s.10B of the Act. With regard to hedging income, he held that the debtors receivable were in foreign currency and were opened to exchange fluctuation,that the assessee has entered into forward contract with ICICI Bank for hedging its export proceeds to vulnerable exposure of currency risk and to hedge the exchange rate, that the transaction were done with the object of protecting the export vision of the assessee from the exchange fluctuation risk, that it had a direct nexus to the export, that hedging income was not derived from any scheme framed by the Government, it had a direct proximate nexus with the export business of the assessee. Accordingly ,he held that hedging income was derived from export business and had assessed under the head income from business. Finally, he held that income aggregating to Rs. 29.13 lakhs was eligible for deduction u/s.10B of the Act. 3.2.Before us, the DR supported the orde....
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....rial, he referred to the case Genesis International Ltd. (80 DTR-Mumbai-(TRIB) 4),wherein the Tribunal had decided the identical issue in favour of the assessee. He also relied upon the case of G Jewel Craft Ltd.(36 ITR-Trib-521)and the order of his predecessor for the A.Y.2009-10. Following the above mentioned two orders of the Tribunal, he directed the AO to exclude the income relating to SEZ unit, while computing book profit u/s.115JB of the Act. The DR left the issue to the discretion of the Bench. The AR supported the order of FAA.We find that the issue stand covered directly by the orders of the Tribunal delivered in the case of Genesis International Ltd. and G Jewel Craft Ltd.(supra).Respectfully, following the above orders, we decide third effective ground of appeal against the AO. 5.Last effective ground of appeal is about allowing the claim of the assessee of employee's contribution to PF and ESCI, amounting to Rs. 2.34 lakhs and Rs. 4.15 lakhs respectively that were paid beyond the due dates specified in respective Act. The AO had disallowed the disputed amounts as they were paid beyond the due dates. However, the FAA relying upon the cases of Hindustan Organics Chemical....