TaxTMI 
TaxTMI 
2022 (10) TMI 831
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....JB of the I.T. Act, 1961 at Rs.2744,13,64,687/-. The case of the assessee company was selected for scrutiny and thereafter, assessment was framed under section 143(3) of the I.T. Act, 1961 vide order dated 28.03.2017 and the total taxable income was determined by the A.O. at Rs.2840,74,56,640/-. 2.1. Aggrieved by the order of the A.O, the assessee carried the matter in appeal before the Ld. CIT(A) who vide order dated 13.02.2018 granted partial relief to the assessee company. 3. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal and has raised the following grounds : 1. "On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)] is bad both in the eyes of law and on facts. 2. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the action of the AO in not allowing deduction amounting to Rs.2,41,37,671/- claimed by the assessee under Section 80-IA of the Act. (ii) That the above said disallowance of deduction has been confirmed despite the fact that the said income is directly relatable to the business of the a....
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....e deciding the appeal for the A.Ys. 2010-11 to 2014-15 and for the reasons given in those orders, he had upheld the order of A.O. He noted that since the facts of the case in the year under consideration are identical to that of earlier years, he following his decision of earlier years, upheld the order of A.O. 6. Aggrieved by the order of Ld. CIT(A), the assessee is now in appeal before us. 7. Before us, the Learned Counsel for the Assessee at the outset, submitted that an identical issue arose in assessee's own case in A.Y. 2014-15 before the Coordinate Bench of Delhi Tribunal and the Tribunal vide order dated 15.02.2022 in ITA.No.1803/Del./2018 has decided the issue in favour of the assessee. He submitted that the Tribunal while deciding the issue in favour of the assessee had followed the order of Coordinate Bench of the Tribunal for the earlier A.Y. 2010-11. He pointed to the relevant findings of the Tribunal. He submitted that since it is an admitted fact that the issue in the present grounds are identical to that of earlier years, therefore, following the decision of Coordinate Bench of Delhi Tribunal in assessee's own case for the A.Y. 2014-15 (supra), the assessee compan....
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....t income directly derived from industrial undertaking is liable u/s 80IA and relied upon the decision of Hon'ble Supreme Court in Conventional Fastners vs. CIT, Dehradun (2018) 256 taxman 61 (SC), Hon'ble Uttaranchal High Court in Conventional Fastners vs. CIT, Dehradun 88 taxmann.com 163 and coordinate Bench of the Tribunal in the case of Conventional Fastners vs. ITO in ITA No.6016/Del/2017 order dated 18.05.2018. 13. Undisputedly, assessee has claimed deduction u/s 80IA qua URI-I, Chambera-II, Dhauliganga and Rangit projects and given the project-wise income detail of such other income as under :- S.No. Particulars URI-I Chamera-II Dhauli-Ganga Rangit Total 1 Rent / Hire Charges from contractors - - 3,545 16,500 20,045 2 Rent / Hire Charges Employees - - - 340 340 3 Rent / Hire Charges - Others 1,477,599 64,212 - 149,378 1,691,189 4 Other Income (Balances, Expenses, Liabilities No longer required written back 13,689,631 1,191,081 3,917,023 1,657,727 20,455,462 5 Township recoveries 368,347 1,205,197 963,426 836,301 3,373,271 6 Excess on physical verification of stores-O&MWritten Back - 3,959 ....
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....uting the deduction u/s 80-IA of the Act, has held as under: "8. The question arose in the context of the Assessee being asked to explain why certain specific items categorized as 'other income' and 'extraordinary item' in the Profit and Loss Account in assessment year 2004-05 should not be excluded from the profit and gains of the Assessee. According to the Revenue, these items could not be considered as profits and gains 'derived from' the eligible business for the purpose of deduction under Section 80 IA. The said six items were : (i) Extra Ordinary Items (ii) Refund from Universal Service Fund (iii) Interest from others (iv) Liquidated Damages (v) Excess provision written back (vi) Others including sale of directories, publications, form, waster paper, etc. 9. The AO held that the six items of income could not be said to be derived from the business of the Assessee and added the income therefrom to the returned income of the Assessee. In the appeal by the Assessee, the Commissioner of Income Tax (Appeals) ["CIT (A)"] agreed with the AO that three of the above items, viz. Extraordinary Items, Refund from Universal Service Fund and Interest....
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....egree nexus of the profits from the eligible business has not been brought into play." 11. As a result, the orders of both the AO and the CIT (A) to the extent they deny the Assessee, which in this case is in the business of providing telecommunication services, deduction in respect of the above items in terms of Section 80IA(2A) are unsustainable in law and have rightly been reversed by the IT AT." 49. Further, the Hon'ble Gujarat High Court in the case of Nirma Industries Ltd. Vs DCIT (2006) 283 ITR 402 has held as under: "27. Insofar as question No. 2 is concerned, according to the Tribunal s. 80-I of the Act uses the phrase 'derived from' and hence the interest received by the assessee from its trade debtors cannot be taken into consideration for the purpose of computing profits derived from an industrial undertaking. The Tribunal has failed to appreciate that it is not the case of the AO that the interest income is not assessable under the head 'Profits and gains of business'. It is only while computing relief under s. 80-I of the Act that the Revenue changes its stand. When one reads the opening portion of s. 80-I of the Act it is clear that words used are: "gro....
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....hese contracts, he has also to face disputes with the State Government and he has also to reckon with delays in payment of amounts that are due to him. If the amounts are not paid at the proper time and interest is awarded or paid for such delay, such interest is only an accretion to the assessee's receipts from the contracts. It is obviously attributable and incidental to the business carried on by him. It would not be correct, as the Tribunal has held, to say that this interest is totally de hors the contract business carried on by the assessee. It is well settled that interest can be assessed under the head 'Income from other sources' only if it cannot be brought within one or the other of the specific heads of charge. We find it difficult to comprehend how the interest receipts by the assessee can be treated as receipts which flow to him de hors the business which is carried on by him. In our view, the interest payable to him certainly partakes of the same character as the receipts for the payment of which he was otherwise entitled under the contract and which payment has been delayed as a result of certain disputes between the parties. It cannot be separated from the other....