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TMI Blog2016 (9) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer in not including the followings items for the purpose of arriving at the profits for working out deduction U/s 80IB(10) of the I.T. Act. i) FDR Interest-HDFC - Rs. 4,32,592 ii) FDR Interest- SBH - Rs. 48,578 iii) Interest on NSC - Rs. 8,750 iv) Forfeited amount - Rs. 1,25,000 v) Miscellaneous income - Rs.2,99,348 vi) Sundry balances written off - Rs. 588 2. The brief facts of the case are that the assessee is engaged in the business of real estate/developers/managers. It filed return of income for the year under consideration on 27/09/2010 declaring Nil income after claiming deduction U/s 80IB(10) for Rs. 2,03,37,343/-. The case was selected for scrutiny. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total 8,37,920.85 Net Interest Paid 22,47,658.24 It was further submitted that Rs. 3,45,000/- was towards the interest from the consumers for delayed payment and Rs. 3,25,000/- was for forfeiture of the amount and Rs. 2,99,348/- was towards miscellaneous income. The ld CIT(A) after considering the arguments has held as under:- "06.0 The submission of the appellant and the facts of the case have been carefully considered. (i) FDR interest: Simply because the fixed deposit was given as security for the OD, any interest on FDR cannot be termed as profit derived from the eligible business. The FDR remains in the nature of investment which incidentally was used as a collateral security for OD. This security could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom them. This income can at best be said to be incidental to its business as it does not carry just degree of nexus with the eligible business. Therefore, the action of the Assessing officer in considering it as 'income from other sources' calls for no interference. (v) Interest on NSC and sundry balances written off: The interest on NSC represents investment and is chargeable under the head 'Income from other sources'. The Assessing officer had not given any details regarding sundry balances written off and the assessee has also not given any submission for the same. In view of it, the addition made by the Assessing officer is confirmed." 4. Now the assessee is in appeal before us for the grounds stated above. For the interest on FDR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the authorities below and the assessee was not entitled for exemption U/s 80IB of the Act on such income. Forfeited amount and interest from customers:- The amount was received by the appellant on cancellation booking in accordance with the clause 6.1 of the charges. It was contended that the said amount was accrued to the assessee on account of the failure of the customers to honor their commitment in terms of the agreement. Similarly the interest was received by the assessee on account of delayed payment of installment. In our view, for the purposes of claiming of forfeiture of the amount amd charging of interest has by the assessee from the customer has a direct nexus of first degree with the business of the assessee there it come ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the additional cost for accommodation and transport charges. Instead thereof, the assessee has provided housing accommodation at the work site and had charged room rental and other incidental charges like electricity and water for the labourers. In our view, the assesse is already claiming expenses for construction of accommodations and providing other incidental services like electricity and water. there is no direct relationship between the business of the assessee and the income derived on account of lodging, electricity and water charges and therefore, the order passed by the ld A.O. as well as the ld CIT(A) are required to be uphold. 5. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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