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| The Tax Publishers2019 TaxPub(DT) 7641 (Kol-Trib) INCOME TAX ACT, 1961
Section 263 Section 80-IC
Interest income solely pertained to security deposits kept with electricity department and these were operational receipts of assessee as company was required to compulsorily deploy funds by way of security deposits with electricity boards in order to obtain supply of power for its unit. Accordingly, interest income having first degree nexus with eligible undertaking of assessee qualified for deduction under section 80-IC and AO did not follow a view which could be said to be 'unsustainable in law'.
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Revision under section 263 - Erroneous and prejudicial order - Allowability of deduction under section 80-IC as regards interest income -
Assessee-company, engaged in manufacturing of Opal and Crystal Glassware and generation and sale of electricity generated from wind mill, claimed deduction under section 80-IC. CIT held order by AO as erroneous in so far as it is prejudicial to the interest of revenue on the ground of AO having considered interest income for working out the sum eligible for deduction under section 80-IC.Held: Interest income solely pertained to security deposits kept with electricity department and these were operational receipts of assessee as company was required to compulsorily deploy funds by way of security deposits with electricity boards in order to obtain supply of power for its unit. Accordingly, interest income having first degree nexus with eligible undertaking of assessee qualified for deduction under section 80-IC and AO did not follow a view which could be said to be 'unsustainable in law'.
Followed:Liberty India v. CIT (2009) 317 ITR 218 (SC) : 2009 TaxPub(DT) 2027 (SC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2013-14
INCOME TAX ACT, 1961
Section 80-IC Section 263
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