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TMI Blog2023 (12) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... sit interest is earned where surplus sum was placed with the bank in the form of Fixed Deposits. Thus, ground no.1 of the appeal is dismissed holding that fixed deposit interest earned by the assessee cannot be said to be an income derived from the business of eligible infrastructure facility. Denial to consider only net interest income after reducing finance cost - HELD THAT:- If blanket netting off is allowed of above bank FDR interest, it will result in lower interest expenditure for determination of eligible income for deduction to that extent, thereby assessee will get the full deduction to the extent of amount of FDR interest. Therefore, the argument of the LD AR though looks attractive. But can be decided only after examinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. It is not the claim of revenue that such scrap sale is of totally unrelated items to the business of assessee. Therefore, income from sale of scrap is eligible for deduction u/s 80IA of the Act. Appeal filed by the assessee is partly allowed. - Shri Prashant Maharishi, AM And Shri Sandeep Singh Karhail, JM For the Assessee : Manish Kant, Kiran Nisar, ARs For the Revenue : Dr. Kishor Dhule, CIT DR ORDER PER PRASHANT MAHARISHI, AM: 01. This appeal is filed by Gateway Terminals India Pvt. Ltd [ Assessee/ Appellant] for A.Y. 2013-14, against the appellate order passed by The Commissioner of Income-tax (Appeals)-2, Thane [the learned CIT (A)], on 8th March, 2019. By this appellate Order appeal filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by denying the benefit u/s. 80IA for income from sale of scrap The appellant craves leave to add to, alter, by deletion, substitution, modification or otherwise all or any of the foregoing grounds of appeal either before or during the hearing of this appeal. 03. The only dispute before us is a. Whether interest on fixed deposit with bank amounting to ₹20,19,07,418/-is income derived from the industrial undertaking and thereby eligible for deduction under Section 80IA of the Act or not. b. Alternatively, assessee has also challenged that if the interest income is not held to be eligible for deduction u/s 80 IA [4], then interest received should also be net off against the interest paid and net amount should be held to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he business of the assessee. Fixed Deposits are made from the surplus funds available, which are from the eligible business, and therefore, it is eligible for deduction. The learned Assessing Officer held that interest received from fixed deposits kept in the bank account is not income derived from specified activity and therefore, it is not eligible for deduction under Section 80IA of the Act. The learned Assessing Officer referred to the several judicial precedents to held so. When the matter reached before the learned CIT (A), the learned CIT (A) following his own decision in assessee s own case in earlier years held that interest income is not eligible for deduction. Accordingly, as per Para no.8.5 to 8.7 of appellate order, interest wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (A) has considered this issue and has categorically held as per paragraph no.8.3 of that order netting off interest income after reducing entire finance cost should be considered for disallowance under Section 80IA of the Act. 08. Learned Departmental Representative vehemently submitted that netting off the interest could be considered only, if interest received and interest paid, both are derived from the eligible business. He submits that netting off of the interest expenditure can only be considered if these conditions are satisfied. He submits that the order of the learned CIT (A) for A.Y. 2014-15 granting of netting off the interest is without any reasoning. If netting off is allowed, then it will tantamount that interest income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of amount of FDR interest . Therefore, the argument of the LD AR though looks attractive. But can be decided only after examination of facts. Before us, details of interest paid which has gone to reduce the eligible income for deduction, nor details of Interest on FDR as well as nexus of interest paid on funds is available. Thus, the alternative argument cannot be considered without ascertaining facts. Therefore , we restore this issue back to the file of ld AO with a direction to assessee to first show the facts about interest earned and interest paid along with nexus, and then substantiate why such netting off should be allowed and to what extent. The ld AO may examine same, and if found in accordance with law, may recompute the deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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