2015 (5) TMI 1244

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....t the order of the Commissioner of Income-tax passed under sec.263 of the Income-tax Act, 1961 for the assessment year 2008-09. 2. First, we take up ITA Nos. 569 & 570/Mds/2012. The facts of the case as narrated for the assessment year 2006-07 are that the assessee has earned interest on deposit to the tune of Rs. 5.65 crores and considered the same as part of the business income so as to claim deduction under sec.80IA of the Act. As this interest income earned from deposits required to be made in trust and retention account maintained under the financing agreement with the lenders from the eligible profit on the ground that the assessee is not in the business of financing, the Assessing Officer treated it as income from other sources. The....

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....activity, the income should be considered as derived from the business of the undertaking and should not be excluded for computation of relief u/s 80 lA. In support of his submission, he relied on the following cases: 1. CIT Vs Indo Swiss Jewels Ltd & anr - 284 ITR 389 (Bom) 2. CIT Vs Jagdishprasad M.Joshi - 318 ITR 420 (Bom) 3. CIT Vs Kansara Modler Ltd - 218 CTR 21 (Raj) 4. CIT Vs Karnal Co-operative Sugar Mills td 0 243 ITR 2 (SC) 5. CIT v. Jaypee DSC Ventures Ltd. -(2011) 335 ITR 132 Del 6. CIT vs. Koshika Telecom Ltd. (2006) 287 ITR 479 (Del) 7. CIT Vs Karnataka Power Corpn - 247 ITR 268 (SC) 8. Bongaigaon Refinary and Petrochemicals Ltd Vs CIT- 251 ITR 329(SC) 9. CIT Vs Bokaro Steel Ltd - 236 ITR 315 (SC) 10. CIT Vs Ponni Su....

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....ourt: 1. Hindustan Lever Ltd. vs. CIT (239 ITR 297) 2. Pandian Chemicals vs. CIT (262 ITR 278) 3. CIT vs. Sterling Foods (237 ITR 579) 6. In these cases, it was looked into the meaning of the word "derive". It was held that the word "derive" usually followed by the word "from" and it means; "get, to trace from a source, arise from, originate in, show the origin of formation of". There must be, for the application of the words "derived from", a direct nexus between the profits and gains and the industrial undertaking. In the case of the Hindustan Lever Ltd. cited supra, the meaning of word "derived" was considered, wherein they referred to the decision of the Privy Council in CIT v. Raja Bahadur Kamakhaya Narayan Singh (1948) 16 ITR 325,....