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TMI Blog2022 (2) TMI 1135X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the legal proposition, we are of the considered view that the disallowance made by the AO while computing the deduction is allowable u/s. 80-IA - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... otal 1 Rent / Hire Charges from contractors 3 , 545 16 , 500 20 , 045 2 Rent / Hire Charges Employees 340 340 3 Rent / Hire Charges - Others 1 , 477 , 599 64 , 212 149 , 378 1 , 691 , 189 4 Other Income ( Balances, Expenses, Liabilities No longer required written back 13 , 689 , 631 1 , 191 , 081 3 , 917 , 023 1 , 657 , 727 20 , 455 , 462 5 Township recoveries 368 , 347 1 , 205 , 197 963 , 426 836 , 301 3 , 373 , 271 6 Excess on physical verification of stores- O& M- Written Back 3 , 959 3 , 959 7 Lease recovery 425 , 227 174 , 301 606 , 806 177 , 603 1 , 383 , 937 8 Electricity recovery 315 , 877 555 , 341 601 , 893 499 , 518 1 , 972 , 629 9 Telephone recovery - - 41 , 803 5 , 157 46 , 960 10 Cable charges 88 , 500 127 , 840 87 , 800 113 , 700 417 , 840 11 Guest house recovery 22 , 912 126 , 019 335 , 464 104 , 848 589 , 243 Total 16 , 388 , 093 3 , 447 , 950 6 , 557 , 760 3 , 561 , 072 29 , 954 , 875 14. The ld. AR for the assessee relied upon the decision rendered by Hon'ble Delhi High Court in the case of Pr. CIT vs. Bharat Sanchar Nigam Ltd. 388 ITR 371 wherein meaning of word "derived fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere: (i) Extra Ordinary Items (ii) Refund from Universal Service Fund (iii) Interest from others (iv) Liquidated Damages (v) Excess provision written back (vi) Others including sale of directories, publications, form, waster paper, etc. 9. The AO held that the six items of income could not be said to be derived from the business of the Assessee and added the income therefrom to the returned income of the Assessee. In the appeal by the Assessee, the Commissioner of Income Tax (Appeals) ["CIT(A)"] agreed with the AO that three of the above items, viz. Extraordinary Items, Refund from Universal Service Fund and Interest from Others, did not form part of the profit derived from eligible business. However, the Assessee's plea regarding the other three items as being derived from the business was accepted by the CIT(A). 10. The Assessee filed appeals and the Revenue filed cross appeals before the ITAT. The ITAT in the impugned orders concluded that with sub-section (2A) beginning with a non-obstante clause, the legislative intention of making available to an undertaking, providing telecommunication services, the benefit of deduction of 100% of the profits an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DCIT (2006) 283 ITR 402 has held as under: "27. Insofar as question No. 2 is concerned, according to the Tribunal s. 80-I of the Act uses the phrase 'derived from' and hence the interest received by the assessee from its trade debtors cannot be taken into consideration for the purpose of computing profits derived from an industrial undertaking. The Tribunal has failed to appreciate that it is not the case of the AO that the interest income is not assessable under the head 'Profits and gains of business'. It is only while computing relief under s. 80-I of the Act that the Revenue changes its stand. When one reads the opening portion of s. 80-I of the Act it is clear that words used are: "gross total income of an assessee includes any profits and gains derived from an industrial undertaking". Once this is the position then, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to the prescribed percentage is to be allowed. That, in fact, the gross total income of the assessee included profits and gains from such business, and this is apparent on a plain glance at the computation in the assessment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld, to say that this interest is totally de hors the contract business carried on by the assessee. It is well settled that interest can be assessed under the head 'Income from other sources' only if it cannot be brought within one or the other of the specific heads of charge. We find it difficult to comprehend how the interest receipts by the assessee can be treated as receipts which flow to him de hors the business which is carried on by him. In our view, the interest payable to him certainly partakes of the same character as the receipts for the payment of which he was otherwise entitled under the contract and which payment has been delayed as a result of certain disputes between the parties. It cannot be separated from the other amounts granted to the assessee under the awards and treated as 'Income from other sources'". 50. In view of the above quoted decisions, we are of the considered view that the disallowance made of ₹ 4,46,54,883/- while computing the deduction allowable u/s. 80-IA of the Act is not justified. Hence, we set aside the orders of the lower authorities and direct the Assessing Officer to recompute the deduction allowable to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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