2010 (9) TMI 1180 - AT - Income Tax

Summary

Issues involved: Appeal against CIT(A)'s order deleting disallowance of deduction u/s.80IB of the Act for interest on late payment from debtors and income from scrap sale.

Summary:
The appeal by Revenue challenged the CIT(A)'s decision to delete the disallowance of deduction u/s.80IB of the Act for interest on late payment from debtors and income from scrap sale. The assessee, engaged in manufacturing texturised yarn, claimed deduction u/s.80IB in the return of income. The Assessing Officer disallowed the deduction on other income sources like late payment charges, scrap sales, and interest on FDR. The CIT(A) allowed the deduction based on precedents, including the decision of the jurisdictional High Court. The CIT(A) directed the AO to allow deduction u/s.80IB for scrap sales and late payment charges but disallow it for interest income from FDR. The Tribunal upheld the CIT(A)'s decision, citing that interest on delayed payment and income from scrap sale are eligible for deduction u/s.80IB as per relevant court decisions. The Tribunal dismissed the Revenue's appeal, confirming the CIT(A)'s order.

In conclusion, the Tribunal upheld the CIT(A)'s decision to allow deduction u/s.80IB for interest on late payment from debtors and income from scrap sale, based on relevant court precedents, and dismissed the Revenue's appeal.