2007 (7) TMI 233

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....ing that the interest income derived by the appellant is not eligible for relief under Sec.10A of the Income-tax Act?" 2. The facts leading to the above substantial question of law are as under: 3. The assessee is a Private Limited Company established under the Madras Export Processing Zone and is engaged in the business of development and export of software. It is a 100% Export Oriented Unit.  The relevant assessment year is 2002-2003 and the corresponding accounting year ended on 31.03.2002.  The assessee filed Return of income on 31.10.2002 admitting 'nil' income after claiming exemption under Section 10A of the Income-tax Act ("Act" in short), amounting to Rs.8,34,84,900/-.  The Return of income was processed under Sect....

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....ted into different areas.  It is further submitted that Section 10A of the Act is a beneficial provision and has to be construed liberally and relied on the Supreme Court judgment in the case of Commissioner of Income-tax Vs. Baby Marines Exports [2007] 290 ITR 323 (SC). 5. Heard the counsel.  In this case, the interest income was earned out of the export realisation and kept in Foreign Currency Deposit Account, as permitted by FERA under Banking Regulations.  Hence, it is clear that there is no direct nexus between the interest earned and the Industrial Undertaking.  The interest received by the assessee is of deposit made by it in the banks.  It is that deposit which is the source of income.  Therefore the a....