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TMI Blog2018 (9) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... pe of expression ‘Income from profits and gains’ incorporated in section 10B(4) of the Act. In view of the aforesaid and also the order dated 16.07.2010 of the Tribunal in assessee’s own case for A.Ys 2003-04 and 2004-05, claim of the assessee deserves to be accepted. We hold so. Scaling down the carry forward losses of non-10B units by the amount of exemption u/s. 10B - Held that:- CIT(A) has directed the Assessing Officer to verify the claim of the assessee and allow it as per law. Pertinently, before the CIT(A) the assessee has relied on various decisions of the Tribunal as well as the judgment of Hon’ble Karnataka High Court in the case of Yokogawa India Ltd. (2011 (8) TMI 845 - KARNATAKA HIGH COURT). In our considered opinion, the mann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer excluded an amount of ₹ 5,74,496/- being the interest earned on bank deposits. The CIT(A) has also affirmed the said action of the Assessing Officer, and not being satisfied with the order of the CIT(A), the assessee is in further appeal before us. 4. Before us, the learned representative explained that interest of ₹ 5,74,476/- was earned on deposits which have been kept with the bank as margin money to obtain facility of Letter of Credit or Bank Guarantees. It was explained that assessee has a 100% buy back arrangement with Merck & Co., in USA, with regard to its production at Taloja unit. In terms of the said arrangement assessee was to give a performance guarantee, which was issued by the bank. In order to obta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities, which is to the effect that the interest income in question is not derived from exports and, therefore, the same is not includible for the purpose of deduction u/s. 10B of the Act. 6. We have carefully considered the rival submissions. The short point before us is with regard to interest income earned by the assessee on Fixed Deposits kept with bank in order to obtain the facility of Bank Guarantees. It is not disputed that the facility of Bank Guarantee obtained by the assessee is in relation to the sales effected from its 100% EOU at Taloja, which is entitled to the benefits of section 10B of the Act. In somewhat similar situation the Hon'ble Karnataka High Court in the case of CIT vs. Motorolo India Electronics (P) Ltd. (98 DTR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee succeeds on this ground. 7. The second grievance of the assessee in this appeal arises from the action of the Assessing Officer of scaling down the carry forward losses of non-10B units by the amount of exemption u/s. 10B of the Act. On this aspect, we find that the CIT(A) has directed the Assessing Officer to verify the claim of the assessee and allow it as per law. Pertinently, before the CIT(A) the assessee has relied on various decisions of the Tribunal as well as the judgment of Hon'ble Karnataka High Court in the case of Yokogawa India Ltd. (ITA NO.78 dated 09.08.2011). In our considered opinion, the manner in which the CIT(A) has decided the issue does not require any interference from our side as the matter has already bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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