M/S INDO SWADISHH INSTRIMENT,NEW DELHI vs. ITO, NEW DELHI

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ITA 6408/DEL/2015Status: DisposedITAT Delhi12 July 2016AY 2009-102 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that interest income earned on a security deposit cannot be considered as derived from the business of the industrial undertaking for the purpose of Section 80IC deduction. This decision followed the Supreme Court's ruling in Pandian Chemicals Ltd. v. CIT.

What were the facts?

The assessee claimed deduction under Section 80IC on interest income earned from a term deposit made as a security deposit for a tender. The tax authorities denied this claim.

What were the issues?

Whether interest income earned on a security deposit is eligible for deduction under Section 80IC of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 80IC

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI BENCH “SMC-I”: NEW DELHI

Before: SHRI P.K.BANSAL

For Appellant: Shri P.K. Gaur, CA, Shri Arjun Mehta, CA
For Respondent: Shri Deepak Garg, Sr. DR
Hearing: 12/07/2016Pronounced: 12/07/2016

O R D E R This appeal is filed against the order of the Ld. CIT(A) dated 15.9.2015. The only issue involved in this appeal filed by the assessee relates to the claim of the deduction by the assessee u/s 80IC on the interest income amounting to Rs. 1,25,996/- which has been earned on the term deposit of Rs. 15 lacs given to Purvanchal Vidyut Vitaran Nigam Limited as a security deposit for a tender.

2.

After hearing the rival submissions and going through the order of the tax authorities below I noted that this issue is no more res-integra in view of the decision of the Hon’ble Supreme Court in the case of Pandian Chemicals Ltd. v. Commissioner of Income-tax [2003] 262 ITR 278 (SC) in which also the assesse has earned the interest income on the security deposit made with the electricity board in which the Hon’ble Supreme Court took the view the interest income on such deposit cannot be said to have been derived from the business of the industrial undertaking. Respectfully following the said decision I confirm the order of the Ld. CIT(A).

3.

In the result the appeal filed by the assesee stands dismissed.

Order pronounced in the open court on 12/07/2016.

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