2013 (2) TMI 934 - AT - Income Tax

Summary

Issues involved: The judgment deals with the denial of deduction under section 80IB in respect of various types of income by the Assessing Officer, which was upheld by the CIT(A), for the assessment year 2008-2009.

1. Denial of deduction under section 80IB:
The only issue in the appeal was the upholding of the Assessing Officer's action in denying deduction under section 80IB for income from interest, job work charges, sale of scrap, and sundry balance written off totaling Rs.3,02,483.

2. Interest income on fixed deposit:
The Tribunal found that interest income earned on a fixed deposit in a bank kept as security with the Electricity Board cannot be considered as derived from the business activity. Citing the case of Pandiyan Chemicals, it was held that such interest income should be assessed as income from other sources, not eligible for deduction under section 80IB.

3. Income from job work, sale of scrap, and sundry balance written off:
Regarding income from job work, sale of scrap, and sundry balance written off, the Tribunal referred to relevant case laws such as Sadhu Forging Ltd. and Impel Forge & Allied Industries Ltd. The Tribunal directed the Assessing Officer to allow deduction under section 80IB for job work charges and sale of scrap, amounting to Rs.1,09,800. Additionally, it held that sundry balance written off should also be eligible for deduction under section 80IB as it forms part of the business income under section 41(1) of the Act.

Conclusion:
The Tribunal allowed the appeal in part, directing the Assessing Officer to allow deduction under section 80IB for job work charges, sale of scrap, and sundry balances written off, but not for the interest income.