CONVENTIONAL FASTNERS,HARIDWAR vs. ITO, HARIDWAR

IN THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN CIRCUIT BENCH, DEHRADUN BEFORE SHRI SAKTIJIT DEY, VICE-PRESIDENT AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No. 407/Del/2014 & 6686/Del/2015 Assessment Years: 2010-11 & 2012-13 Conventional Fastners, Versus Income-tax Officer, C/o Shri Ranveer Sharma, Adv. Ward 1, Haridwar. 1st Floor, Shri Ganesh Complex, Ranipur More, Haridwar. PAN:AAFFC8403N (Appellant) (Respondent) Assessee by : None Revenue by : Sh. A.S. Rana, Sr. DR Date of hearing : 20.06.2023 Date of pronouncement: 20.06.2023 ORDER Captioned appeals by the assessee arise out of two separate orders of learned Commissioner of Income-tax (Appeals), Dehradun pertaining to the assessment years 2010-11 and 2012-13.

ITA No. 407/Del/2014 & 6686/Del/2015

that though the appeals were fixed for hearing on number of

occasions earlier, however, the assessee has always remained

absent. Thus, it is evident, the assessee is not at all diligent in

pursuing the present appeals. Since, sufficient opportunity of being

heard has already been extended, the assessee deserves no more

leniency. Therefore, we proceed to dispose of the appeals ex parte qua assessee after hearing learned Departmental Representative and considering materials on record.

disallowance of assessee’s claim of deduction under section 80IC of the Income-tax Act, 1961.

to be engaged in the business of manufacturing and sale of electronic

meters. In the return of income filed for the impugned assessment

years, the assessee claimed deduction under section 80IC of the Act.

In course of assessment proceedings, the Assessing Officer, while

verifying assessee’s claim of deduction under section 80IC of the Act,

noticed that while computing deduction, the assessee has included

interest received on FDRs as part of business profits. Noticing this

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fact, the Assessing Officer called upon the assessee to explain how

deduction under section 80IC of the Act can be claimed on interest

income, as, it is not derived from business. In response to the query

raised by the Assessing Officer, the assessee furnished its reply

justifying the claim. However, ultimately, the Assessing Officer

rejecting assessee’s claim, disallowed the deduction claimed u/s.

80IC of the Act in respect of interest income. While deciding the issue

in appeal, learned first appellate authority upheld the disallowance made by the Assessing Officer.

perused materials on record. As could be seen from the facts

discussed by learned first appellate authority, the interest income was

earned by the assessee on fixed deposits pledged to UPCL towards

performance guarantee. He has further noted that while deciding

identical issue in assessee’s own case in an appeal arising out of

order passed u/s. 263 of the Act for the assessment year 2009-10,

the Tribunal in ITA No. 2556/Del/2013 has given a categorical finding

that deduction under section 80IC of the Act is not available on

interest income. Before us, learned Departmental Representative has

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ITA No. 407/Del/2014 & 6686/Del/2015

submitted that the dispute arising in assessment year 2009-10 has,

ultimately, been settled by Hon’ble Supreme Court by holding that the

interest earned on fixed deposits is not eligible for deduction under

section 80IC of the Act. In this context, we may refer to the decision

of Hon’ble Supreme Court in case of Conventional Fastners vs. CIT,

(2018) 94 taxmann.com 80(SC). Keeping in view the aforesaid factual

position, we do not find any reason to interfere with the decision of

learned Commissioner (Appeals). Accordingly, grounds are

dismissed.

Order pronounced in the open court on 20/06/2023.

Sd/- Sd/- (M. BALAGANESH) (SAKTIJIT DEY) ACCOUNTANT MEMBER VICE-PRESIDENT

Dated: 20.06.2023 *aks/-

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