TaxTMI 
TaxTMI 
2023 (12) TMI 334
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....assessee against the assessment order dated 30th December, 2016, passed under Section 143(3) read with section 92CA(3) of the Income-tax Act, 1961 (the Act) by the Dy. Commissioner of Income Tax, Panvel, Circle Panvel (the learned Assessing Officer), was partly allowed. 02. The assessee has raised following grounds of appeal :- "Ground 1: Denial of deduction u/s. 80IA for interest on Fixed Deposit with bank: Rs. 20,19,07,418/- 1.1 The learned CIT(A) has erred in law and facts of the case in confirming the action of the AO by denying the benefit u/s. 80IA for interest income from FDs with bank. 1.2 The learned CIT(A) failed to appreciate that the monies were kept in FDs with bank for the business reason and henc....
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....d and net amount should be held to be not eligible for deduction. c. Whether sale of scrap of Rs.46,06,161/- generated out of sale of wire ropes, M S Scrap and waste oils should be held to be income generated eligible for deduction u/s 80 IA [4] of The Act. 04. Brief facts of the case shows that assessee is operating a container freight terminal at Jawaharlal Nehru Port Trust. It filed its return of income for A.Y. 2013-14 on 30th November, 2013, declaring taxable income of Rs.1,25,42,260/-. Assessee has claimed deduction under Section 80IA(4) of the Act of Rs.118,44,088/-. The return of income was picked up for scrutiny. The scrutiny assessment culminated into an assessment order passed on 30th December, 2016. Against this asse....
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....ellate order, interest was held to be not eligible for deduction. Thus, deduction under Section 80IA of the Act on the above interest income was denied. 06. After hearing both the parties, we find that for A.Y. 2012-13, identical issue is covered against assessee in ITA No.300/Mum/2022 dated 28th May, 2020. In that case, identical issue was decided by the co-ordinate Bench as per paragraph no. 9 of the order, holding that fixed deposit interest income earned by the assessee could not be said to have any nexus with the eligible business for which deduction under Section 80IA of the Act is available. Anyway, assessee has stated before LD lower authorities that bank Fixed Deposit interest is earned where surplus sum was placed with the bank....
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....ount that interest income on fixed deposit is derived from the eligible business, which would be contrary to the decision of ITAT in assessee's own case. Therefore, it was submitted that netting off the interest could not be allowed. 09. We have carefully considered the rival contentions and perused the orders of the lower authorities. We find that income and expenditure both should be derived from the business of industrial undertaking eligible for deduction, then only, such interest can be net off. If blanket net off is directed then, it tantamount to allowance of deduction u/s 80 IA [4] of the Act on FDR interest income, which is already held to be not eligible for deduction. Accordingly, netting off of the interest paid and interest ....
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....y recompute the deduction u/s 80 IA [4] of the Act. Accordingly, alternative ground of the appeal is allowed with above directions. 010. Third ground of appeal is with respect to allowability of benefit under Section 80IA of the Act on income from sale of scrap of Rs.46,06,161/- . We find that the sale of scrap was stated by the learned Assessing Officer as not derived from the business of industrial undertaking. The learned CIT (A) vide paragraph no. 9 has upheld the order of the learned Assessing Officer. 011. After hearing both the parties, we find that assessee has earned income from sale of scrap by selling wire ropes, Scrap and Waste oil. These are the income generated out of the maintenance and operational activity of the port.....