The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) has held that the deduction under section 80IC of the Income Tax Act, 1961 is allowable to the income from Interest on Electricity Deposit, Recovery from Transporters and Sundry Balances of Vendors written off.
Earlier, the Assessing Officer, while conducting the assessment proceedings against M/s. Gujarat Ambuja Exports Ltd, held that these receipts cannot be deducted while computing deduction under the provision. According to the AO, they were not in the nature of incomes derived from the business of the assessee for the purposes of being eligible to claim deduction of profits thereon.
On appeal, the first appellate authority allowed the claim of the assessee and therefore, the department approached the Tribunal.
Ms. Annapurna Gupta, Accountant Member And Ms. Suchitra Kamble, Judicial Member, while upholding the order of the Commissioner (Appeals) held that “it is abundantly clear that the basis on which the Ld. CIT(A) had allowed the assessee’s claim of deduction u/s. 80IC in relation to income being Interest on Electricity Deposit, Recovery from Transporters and Sundry Balances of Vendors written off, being the order of the Ld. CIT(A) for Assessment Year 2012-13 & 2013-14,the same has been upheld by the ITAT. We have noted that the ITAT with respect to the very same nature of incomes as in the impugned order had held that such incomes has affirmed the findings of the Ld.CIT(A) that they are derived from the manufacturing activity and therefore were eligible to claim deduction of profits earned thereon u/s. 80IC of the Act.”
Advocates Shri Tushar Hemani, Sr. Adv. And Shri Parimalsinh B. Parmar appeared for the assessee.
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