JEWEL ART,MUMBAI vs. DCIT CEN CIR 13, MUMBAI

O R D E R

PER PAWAN SINGH, JM:

wherein the disallowance was sustained. Further aggrieved, the assessee has filed the present appeal before us. 3. We have heard the ld. Authorized Representative (AR) of the assessee and the ld. Departmental Representative (DR) for Revenue. The Ld. AR of assessee argued that the grounds of appeal raised in the present appeal are covered in favor of assessee in his own case for AY 2008-09 in dated 30.09.2013. On the other hand ld. DR for the Revenue strongly supported the order of authorities below.

4. We have considered the rival contentions of the parties and seen that the similar issue arose in assessee’s own case for AY 2008-09 and the Co- ordinate Bench of this Tribunal made the following order: “The dispute arose on the treatment of the said interest income. Assessee considered the same as a 'business receipt'. Assessee claimed exemption u/s 10A of the Act in respect of the said interest receipts. Per contra, Revenue Authorities treated the same as 'income from other sources' and denied the benefit of deduction u/s 10A of the Act. Aggrieved with the same, assessee is in appeal before us.

4. During the proceedings before us, Ld Counsel for the assessee submitted that the assessee has not made FDs with the bank out his excess funds or for a longer period with an intention to earn interest income. Further, elaborating the same, Ld Counsel for the assessee submitted that the FDs made were out of the working capital and out of the business funds. It is the business requirement of the assessee that the FDs are to be made with the directions of the bank. Referring to various documents placed in the paper book, Ld Counsel for the assessee brought our attention to the correspondence placed at page 28 onward and read out the relevant instances of the bank insisting the assessee to prepare term deposits in the bank. Further, bringing our attention to various decisions of the Tribunal, wherein one of us (AM) to the order in the case of ACIT vs. M/s. Prestress Wire Industries in ITA No. 8418/M/2010 (AY 2007-2008) and ITA No. 6312/M/2011 (AY 2008-2009) and others dated 31.1.2014, Ld Counsel for the assessee mentioned that the said decision is relevant for the proposition that, under the identical factual matrix, the receipts were treated as 'business receipts' and declared as eligible for deduction u/s 80IA of the Act. In this regard, he brought our attention to the relevant paras 14 to 16 of the said Tribunal's order (supra). Further, bringing our attention to other decisions of the Tribunal, Ld Counsel for the assessee mentioned that they relate to prior to the amendment to section 10A(4) of the Act. He also relied on the Judgment of the Apex Court in the case of CIT vs. Karnal Cooperative Sugar Mills Ltd 243 ITR 2 (SC) and the judgment of the Bombay High court in the case of CIT vs. Indo Swiss Jewells Ltd 284 ITR 389 (Bom) and also on various precedents of the Hon'ble Supreme Court as well as various High Courts, copies of which are placed in voluminous paper book, and submitted that the said judgments were relied upon by the Tribunal in adjudicating the issue in favour of the assessee in the said case dated 31.1.2014 (supra).

by the assessee are allowed.”

5. Considering the similarities of the facts of present, we are of the opinion that the interest receipt constitute the business receipt and are eligible for deduction u/s 10A as held in assessee’s own case for AY-2008-09. In the result, appeal of the assessee is allowed. Order pronounced in the open court on this 7th October, 2016./- Sd/- Sd/- (R.C.SHARMA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 07/10/2016 S.K.PS

Copy of the Order forwarded to :