PRAYAS WRITING INSTRUMENTS, MUMBAI V. DCIT 24(3), MUMBAI

ITA 1809/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1367 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2010
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 23-06-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 20-03-2009
• Court: TRIBUNAL
• Department Lawyers: DEEPAK SUTARIA
• Keywords: Business income
• Section: 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C,MUMBAI BEFORE SHRI D.K. AGARWAL (JM) & SHRI R.K. PANDA (AM ) I.T.A.NO.1809/MUM/2009 (A.Y. 2005-06) M/S.PRAYAS WRITING INSTRUMENTS, 113, SATI INDL.ESTATE, 1B, PATEL RD., GOREGAON (E), MUMBAI-400 063. PAN: AAGFP6727P VS. DY.COMMR. OF INCOME-TAX-24(3), PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI-51. APPELLANT RESPONDENT APPELLANT BY SHR I K. GOPAL. RESPONDENT BY SHRI D EEPAK SUTARIA. O R D E R PER R.K. PANDA, AM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 05-01- 2008 OF CIT(A)-XXIV, MUMBAI, RELATING TO ASST. YEAR 2005-06. 2. GROUND NO. 1 BY THE ASSESSEE READS AS UNDER : 1. THE LEARNED ASSESSING OFFICER ERRED IN CONFIR MING THE DISALLOWANCE OF CLAIM OF DUTY DRAW-BACK OF RS.11,45 ,028/- U/S.80IB. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, FA IRLY CONCEDED THAT THIS ISSUE IS AGAINST THE ASSESSEE BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF LIBERTY (INDIA) LTD. REPORTED IN 317 ITR 218. IN VI EW OF THE ABOVE, THIS GROUND BY THE ASSESSEE IS DISMISSED. 3. GROUND NO. 2 BY THE ASSESSEE READS AS UNDER : 2. THE LEARNED CIT APPEAL ERRED IN CONFIRMING TH E DISALLOWANCE OF INTEREST ON BANK FDR OF RS.19,081/- U/S.80IB. AFTER HEARING BOTH THE SIDES, WE FIND THE ASSESSEE RECEIVED INTEREST OF RS.19,081/- AND CLAIMED DEDUCTION THEREON U/S.80IA( 7). THE AO DISALLOWED THE CLAIM ON THE GROUND THAT THE SAME IS NOT DERIVED FR OM INDUSTRIAL UNDERTAKING. ITA 2 BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT THE FDRS WERE KEPT WITH THE BANK FOR TAKING OVERDRAFT FACILITIES AND, THEREFORE , SUCH INTEREST INCOME WAS BUSINESS INCOME OF THE ASSESSEE AND ACCORDINGLY DED UCTION U/S.80IA(7) SHOULD BE ALLOWED. HOWEVER, THE CIT(A), FOLLOWING A FEW DECIS IONS, REJECTED THE CLAIM OF THE ASSESSEE HOLDING THAT INTEREST IS NOT DERIVED FROM INDUSTRIAL UNDERTAKING FOR WHICH THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S.80I/ 80IA OF THE I.T. ACT. WE FIND THE CO-ORDINATE BENCHES OF THE TRIBUNAL ARE TAKING THE CONSISTENT VIEW THAT INTEREST EARNED ON FD, EVEN IF KEPT WITH THE BANK FOR TAKING OVERDRAFT FACILITIES ETC., IS NOT ENTITLED TO DEDUCTION U/S. 80IA/80IB OF THE ACT SIN CE THE SAME IS NOT DERIVED FROM INDUSTRIAL UNDERTAKING. RESPECTFULLY FOLLOWING THE CONSISTENT VIEW OF THE CO- ORDINATE BENCHES OF THE TRIBUNAL, WE HOLD THAT THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S.80IB ON INTEREST ON BANK FDRS AMOUNTI NG TO RS.19,081/-. THIS GROUND BY THE ASSESSEE IS ACCORDINGLY DISMISSED. 4. IN THE RESULT, HE APPEAL FILED BY THE ASSESSEE I S DISMISSED. ORDER PRONOUNCED ON THE 30TH DAY OF JUNE, 2010. SD/- SD/- (D.K. AGARWAL) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 30TH JUNE , 2010 NG: COPY TO : 1. ASSESSEE. 2.DEPARTMENT. 3 CIT(A)-XXIV,MUMBAI. 4 CIT-24,MUMBAI. 5.DR,C BENCH,MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST.REGISTRAR, ITAT, MUMBAI. ITA 3 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 23-06-2010 SR.PS/ 2 DRAFT PLACED BEFORE AUTHOR 24-06-2010 SR.PS/ 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER