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TMI Blog2018 (10) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome from house property’, interest thereon is allowable deduction u/s 24B of the Act. So following the decision rendered by co-ordinate bench of Tribunal in its own case for Assessment Year 2009-10 [2015 (2) TMI 102 - ITAT DELHI], we direct the AO to allow the deduction claimed by the assess after verifying the amount of loan utilized, interest paid thereon and thereafter assess the income from the house property earned by the assessee, by providing opportunity of being heard. So ground determined in favour of the assessee. Non exclusion of the scrap sale from turn over as well as total turnover while computing the deduction u/s 10B - Held that:- The amount of sale of scrap is not includable in the total turnover or local turn over as the assessee is not into the business of scraps, so we find no illegality or perversity in the findings returned by the ld. CIT(A), hence ground determined against the assessee. - I.T.A. No.1454/Del/2015 - - - Dated:- 3-10-2018 - Shri G.D. Agrawal And Shri Kuldip Singh, Judicial Member For the Assessee : Sh. Ashish Goel, CA For the Revenue : None (Sr. DR) ORDER PER KULDIP SINGH, JUDICIAL MEMBER : Appellant, Universal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover while computing deduction under Section 10B of the Act. 8 (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the action of the AO in not allowing deduction of an amount of ₹ 14,29,186/- on account of interest claimed under Section 24(b) of the Act while computing income from house property. (ii) That the abovesaid disallowance had been made despite the fact that the loan on which interest has been paid was utilized for the purpose of construction of let out property. 9 (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the adhoc disallowance of ₹ 44,430/- made by the AO being 10% of the expenses incurred on account of entertainment expenses, travelling and conveyance. (ii) That the disallowance has been confirmed despite the same being made arbitrarily and without there being any basis for the same. (iii) The disallowance has been confirmed rejecting the contention of assessee that all the expenses have been incurred wholly and exclusively for the purposes of business only. 10 (i) On the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and circumstances of the case. Ld. CIT DR made a request for adjournment as Senior DR is on leave. Since the issue in controversy is covered in assessee s own case for AY 2009-10, as contended by the ld. AR for the assessee by placing on record copy of the order, the contention raised by ld. CIT DR for adjournment is hereby rejected. GROUNDS NO. 1, 2 3 5. Ground nos.1, 2 and 3 have not been pressed by the Ld. AR for the assessee, hence, need no adjudication. GROUND NO. 4 6. AO as well as CIT(A) have excluded the amount of ₹ 14,21,719/- claimed by the assessee on account of interest for computing deduction u/s 10B of Act. The Ld. AR for the assessee contended that since the interest income is inextricably link with the business undertaking and as such part of the business profit and further contended that the issue in controversy is covered in assessee s favour in its own case for Assessment Year 2009-10 in ITA no. 2034/Del/2013. 7. When we examine the decision rendered by co-ordinate bench of Tribunal in assessee s own case for Assessment Year 2009-10. The issue has been decided in favour of the assessee. Operating part of the order pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the industrial undertaking' alone. Turning to the nature of present interest income, being arising from FDRs obtained for margin money for the purposes of availing credit limits from banks, it becomes vivid that such interest bears the requisite characteristics of a 'business income.' The Mumbai Bench of the Tribunal in Livingstones Jewellery (P) Ltd. Vs. DCIT (2009) 31 SOT 323 (Mum) has held that interest derived by an exporter from fixed deposits made with the bank for obtaining credit limits is eligible for the benefit u/s 10A. Similar view has been expressed in ACIT vs. Motorola India Electricals (P) Ltd. (2008) 114 ITD 387 (Bang.) by holding that the interest income having close nexus with the business activity of the assessee is assessable as income from business and, hence, eligible for the benefit u/s 10A and section 10B . In view of the above discussion, we hold that the assessee is entitled to deduction u/s10B of the Act in respect of the interest income earned on FDRs made for the purposes of keeping margin money or for availing any other credit facility from banks. 8. The impugned order on the issue of deduction u/s 10B is set aside and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income from house property , interest thereon is allowable deduction u/s 24B of the Act. So following the decision rendered by co-ordinate bench of Tribunal, we direct the AO to allow the deduction claimed by the assess after verifying the amount of loan utilized, interest paid thereon and thereafter assess the income from the house property earned by the assessee, by providing opportunity of being heard. So ground no. 5 and 8 are determined in favour of the assessee. GROUND NO. 6 11. Ground no. 6 is not pressed by Ld. AR for assessee because of the meager amount involved, so it needs no adjudication. GROUND NO. 7 12. AO as well as the CIT(A) has not excluded the scrap sale from turn over as well as total turnover while computing the deduction u/s 10B of the Act. This issue has also been decided in assessee s favour in its own case for AY 2009-10 by the coordinate bench of Tribunal, which has been affirmed by the Hon ble Delhi High Court. Operative part of the decision rendered by Hon ble High Court is extracted as under :- 5. In allowing the Assessee s appeal by the impugned order, the ITAT held that in terms of the judgment of the Supreme Court in CIT v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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