9911796707
TMI Blog2020 (3) TMI 1362X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,48,450/- from bank, Rs. 2,55,50,690/- from customers, Rs. 4,13,633/- from security deposit relates to business activities." 2. Brief facts of the case are that the assessee company carries on the business of manufacturing and trading of iron and steel products and it had filed return of income for AY 2014-15 declaring total income of Rs. 5,654/- under normal provisions of the Act representing non-operating miscellaneous income after claiming 100% deduction of the business profit of Rs. 4,17,64,799/- u/s. 80IC(2)(a)(i) of the Income-tax Act, 1961 (hereinafter referred to as the "Act") and showed book profit of Rs. 3,82,04,075/-. The assessee company has an industrial area in Bonda, Narang, District-Kamrup, Gauhati in the state of As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordingly, this ground is partly allowed." 4. Aggrieved the Revenue is before us assailing the aforesaid action of Ld. CIT(A). However, we note that the Ld. CIT(A) at page 15 of the impugned order has confirmed the action of the AO in respect of disallowance of interest income from fixed deposit. However, has mistakenly typed the figure as Rs. 5,52,844/- in place of Rs. 20,37,345/-. Since the interest income from fixed deposit cannot be having first degree nexus with the profit and gain derived from the undertaking which is eligible for deduction u/s. 80IC of the Act, we confirm the order of the Ld. CIT(A) and correct the mistake of the figures shown as Rs. 20,37,345/- in place of Rs. 5,52,844/-. And so the Revenue appeal to this extend su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m customers, we note that assessee manufactures C. R. Coil and sell the same to the customers on credit. And if there is any delay in receipt of payment from the customers and since it affects the assessee's working capital, the assessee is compelled to borrow external funds for which it incurs interest expenditure. In order to compensate the loss of any interest payment, assessee charges interest from the customers/sundry debtors for the delay in making payment to it. It was pointed out by the Ld. AR that as per the mandatory accounting standard and the Companies Act, the same are reported as income and expenses separately. According to Ld. AR, such interest income and interest payment are directly related to the assessee's business operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Supreme Court decision in Govinda Choudhury (supra), the income thus derived by the assessee from the undertaking it is eligible for deduction u/s. 80IC(2) of the Act as held by the Hon'ble Guwahati High Court in Universal Pipes (P) Ltd. (supra) and, therefore, the AO's action of not allowing deduction is per se erroneous. However, we are not inclined to decide these grounds since it is noted that the Ld. CIT(A) has not adjudicated the issues relating to two issues i.e. deduction in respect of income from delayed payment from customers and interest on security deposit (electricity), therefore, both these issues are set aside back to the file of the Ld. CIT(A) for fresh adjudication with a direction to decide the issues in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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