TaxTMI 
TaxTMI 
2018 (7) TMI 2216
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....n this regard is projected in the following grounds of appeal :- "1. The order of the Learned CIT (Appeals), in so far as it is prejudicial to the interest of revenue, is opposed to law and the facts and circumstances of the case. 2. The Ld. CIT (A) erred in facts and in the circumstances and in law in holding that the provisions of Sec.115JB of the Act are not applicable to the assessee company which is a company engaged in generation and supply of electricity power without appreciating that the pre-amended Sec. 155JB(2) applies to all companies irrespective or whether the provisions of Sec.211(2) of the Companies Act applies to it or not and the amendment is only applicable from the AY 2013-14 onwards. 3. For these and such other grounds that may be urged at the time of hearing, it is humbly prayed that the order of the Ld. CIT (A) be reversed and that of the Assessing Officer be restored. 4. The appellant craves leave to add, to alter, to amend or delete any of the grounds that may be urged at the time of hearing of appeal." 3. When this appeal was taken up for hearing, it was brought to our notice that identical issue had come up for consideration in the assessee....
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....t. (2) Every assessee,- (a) being a company, other than a company referred to in clause (b), shall, for the purposes of this section, prepare its profit and loss account for the relevant previous year in accordance with the provisions of Part II of Schedule VI to the Companies Act, 1956 (1 of 1956); or (b) being a company, to which the proviso to sub-section (2) of section 211 of the Companies Act, 1956 (1 of 1956) is applicable, shall, for the purposes of this section, prepare its profit and loss account for the relevant previous year in accordance with the provisions of the Act governing such company:" 16. By virtue of this amendment, the Legislature has brought those companies to which proviso to sub-section (2) of section 211 of the Companies Act applies within the network of provisions of section 115JB of the Act. As per the provisions of section 211(1), every balance sheet of a company shall be prepared in accordance with Part I & II of Schedule VI of the Companies Act, but as per proviso to sub-section (1), insurance or banking company or any company engaged in the generation or supply of electricity or to any other class of company for which a form of balance sh....
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....ither unconditionally or subject to such conditions as may be specified in the notification." 17. Undisputedly, the assessee is engaged in the generation of power, therefore as per proviso to section 211(1), the assessee was not required to prepare its balance sheet and profit & loss account in the form set out in Part-I & III of Schedule VI to the Companies Act, as the assessee was required to prepare its balance sheet and profit & loss account as per the Act notified by the Government. Now the question arises under such circumstances, whether the provisions of section 115JB would apply to the assessee's case, where he was not required to prepare the balance sheet and profit & loss account as per Part I & III of Schedule VI to the Companies Act. This aspect was examined by this Tribunal in the case of Karnataka Power Corporation Ltd. v. ACIT, ITA No.711/Bang/2011 in which it was held that the assessee is engaged in the generation of power and in an electric company, it is governed by and bound to follow the relevant Electricity Act and Rules thereto in preparation of its financial statements. Therefore, the provisions of section 115JB of the Act are not applicable to the assess....
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....stances of the cross-objector's case. 3. The learned CIT[A] is not justified in upholding the restriction of the claim u/s.80IA[4][iv] of the Act, in respect of the income computed under the head "Business" only and not in respect of interest income assessed under the head "Other Sources" appertaining to the undertaking carrying on the business-of generation of power, to which it is legitimately entitled to deduction u/s.801A[4][iv] of the Act under the facts and in the circumstances of the cross-objector's case." 7. All other grounds were not pressed for adjudication by the ld. counsel for the assessee. 8. As far as ground Nos.2 & 3 raised by the assessee in its CO are concerned, the issue revolves around the question, whether interest earned from fixed deposits has to be regarded as business income on which deduction u/s. u/s.80IA[4][iv] of the Act should be allowed; or the same should be treated as income from 'other sources'. This aspect was also considered by the Tribunal in assessee's own case in AY 2010-11 in ITA No.1394/Bang/2013 in its order dated 22.12.2017. The Tribunal set aside the order of the CIT(Appeals) and remanded the issue for fresh consideratio....
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.... view that on the facts of the present case and taking into consideration the decisions referred to supra, the decision in PANDIAN CHEMICALS LTD VS, COMMISSIONER OF INCOME TAX would not be applicable to the present case. In the instant case as already stated for the purpose of its business that is export business, the Fixed Deposits were given as security in order to avail credit facilities and consequently on facts we are of the considered view that the decision in GONVIDA CHOUDHURY & SONS and CHIINNA NACHIMUTHU CONSTRUCTIONS are applicable and the decision of the Apex Court in PANDIAN CHEMICALS LTD. VS. COMMISSIONER OF INCOME TAX can be distinguished. Accordingly we answer the substantial questions of law raised in this appeal against the revenue and dismiss the appeal." 8. The Hon'ble Delhi High Court while delivering the judgment on 11.03.2011 in the case of Jaypee DSC Ventures Ltd. (supra) has confirmed the view taken by the Hon'ble Karnataka High Court while holding that the amount of investment in fixed deposits which were kept in bank for furnishing of bank guarantee is business income, not income from other sources. The relevant observations of the Hon'ble Delhi High Co....