TaxTMI 
TaxTMI 
2019 (3) TMI 1861
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.... a common ground between the parties that the short point involved in this appeal arises from the action of the Assessing Officer in excluding the interest income earned of Rs. 2,32,939/- while determining the profits eligible for the purpose of computation of deduction under Section 10A of the Act. 3. From para 4.2 of the order of CIT(A), it emerges that the interest income of Rs. 2,24,839/- represents interest earned on fixed deposit placed in the State Bank of India for availing of working capital facilities and, the balance of Rs. 8,100/- is earned from security deposit placed for obtaining electricity connection. The Assessing Officer as well as the CIT(A) have excluded the said incomes from the "profits of the business" for computing....
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.... order, the said income has been reduced twice. 2. It is humbly prayed that the relief as prayed for here-in-above should be granted." 16. The grievance of the assessee in its appeal revolves around the computation of deduction eligible u/s 10A of the Act. The first grievance of the assessee is with regard to the action of income-tax authorities in excluding the interest income of Rs. 4,48,942/- for determination of profits of the business in order to calculate the deduction u/s 10A of the Act. In this context, the relevant facts are that assessee had borrowed funds from State Bank of India which included working capital facilities as also term loans. For availing credit facilities, assessee was required to place FDRs with the bank whic....
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....ties by pointing out that the interest income was not directly derived from the exports. 19. On this aspect, reliance has been placed before us on the judgment of the Hon'ble Karnataka High Court in the case of M/s. Hewlett Packard Global Soft Ltd., ITA No. 812/2007 dated 30.10.2017 wherein interest income earned on funds placed with the bank was held to be eligible for benefits of Sec. 10A of the Act on the ground that such income was incidental to the business eligible for the benefits of Sec. 10A of the Act. In the case before us, it is factually evident that the interest income on FDRs with bank is with respect to the borrowings which have in turn been utilised for the eligible business and, therefore, such interest income would b....