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TMI Blog2021 (4) TMI 1197X X X X Extracts X X X X X X X X Extracts X X X X ..... in the appeal was denial of deduction u/s 80-IA on interest on Income Tax refund and interest earned by the assessee on Fixed Deposits (FDs) held with the bank. During hearing of the appeal, it was submitted that there were two reasons for parking of funds in Fixed Deposits viz. (i) Under license agreement with JNPT, the assessee was under an obligation to replace cranes after certain period, which constitute significant portion of its machinery and equipment; (ii) the tariff collected by the assessee from its customers was under dispute. These were the conditions for operating and maintaining the port activities, which were eligible for deduction u/s 80-IA. Accordingly, the assessee was compelled to keep aside certain amount and put the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, the interest income had direct and proximate connection with assessee's business unlike Liberty's case which dealt with deduction of duty drawback. As against this, the assessee placed reliance on two decisions of Hon'ble Bombay High Court in CIT V/s Jagdishprasad M. Joshi (318 ITR 420 25/11/2008) and Tema Exchangers Manufacturers Pvt. Ltd. V/s ACIT (ITA No. 415 of 2004 dated 18/07/2018) and another decision of Mumbai Tribunal in ITO V/s Hiranandani Builders (83 Taxmann.com 65 28/10/2015) which dealt with deduction of interest income. The decision in Tema Exchangers Manufacturers Pvt. Ltd. V/s ACIT (supra) as well as decision of Tribunal in ITO V/s Hiranandani Builders (supra) was rendered subsequent to decision in Liberty India and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as part and parcel of the business activities was duly taken note of in para 7 of the order. However, the point of dispute was not the circumstances under which the deposits were held by the assessee and whether the same were part & parcel of business activities. The same is evident from the fact that Ld. AO, in all the years, had accepted interest on FDR as Business Income only. Rather the point of dispute was whether the assessee was eligible for deduction on interest on FDR within four corners of Sec. 80-IA or not. In fact, the assessee has claimed deduction u/s 80-IA even on interest on Income Tax refund which is ultimately assessed as 'Income from Other Sources'. Therefore, the fact that FDRs were kept out of commercial expedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posits and other interest income u/s 80-IA. The Hon'ble Court, relying upon aforesaid decision of Hon'ble Delhi High Court in CIT V/s Eltek SGS (P) Ltd. (supra; dated 19/02/2008), refused to admit the substantial question of law raised by the revenue. This decision of CIT V/s Jagdishprasad M. Joshi (supra) has subsequently been followed by Hon'ble Bombay High Court in Tema Exchangers Manufacturers Pvt. Ltd. V/s ACIT (ITA No. 415 of 2004) rendered on 18/07/2018. This case law similarly deals with assessee's eligibility to claim deduction of interest income u/s 80-IA. In this decision, Hon'ble Court has also referred to the decision of Delhi High Court in CIT V/s Eltek SGS (P) Ltd. (supra; dated 19/02/2008). However, following Liberty India, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No further elaboration would be required on this decision. Lastly, the two decisions of Hon'ble Rajasthan High Court and Hon'ble Madras High Court have been cited for the first time during the hearing of this application. These decisions are from non jurisdictional High Court and the same were not cited during the hearing of the appeal. Therefore, non consideration of these decisions would not make the order erroneous which would call for any interference in terms of mandate of Section 254(2). 6. We find that the provisions of Section 254(2) have narrow application and envisage rectification of mistakes which are apparent from record. There is power to rectify but not to review the order. The arguments of Ld. Sr. Counsel, if accepted, wou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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