Case Law Details
Viramgam Mahesana Project Ltd Vs ACIT (ITAT Delhi)
ITAT Delhi held that benefit of deduction under section 80IA of the Income Tax Act eligible for interest income earned on fixed deposit.
Facts- The assessee company is engaged in the business of developing of any infrastructure facility and claims to be eligible for a deduction of an amount equal to 100% of profits and gains derived from such business for any ten consecutive assessment years out of 20 years from the year, in which it develops or begins to operate.
During the course of assessment proceedings, AO noticed that the assessee company has claimed deduction u/s 80IA. It was observed that income of interest from fixed deposits is included in pour business and on that basis the assessee company have calculated profit before tax and deduction u/s 80IA.
Conclusion- Hon’ble Gujarat High Court in CIT vs. Shah Alloys Ltd. [2017] 84 taxmann.com 256 (Gujarat) held that where interest received on margin money placed for business purpose was held to be eligible for deduction u/s 80-IA being incidental to business of assessee. Hon’ble Bombay High Court in CIT vs. Jagdishprasad M. Joshi [2009] 318 ITR 420 (Bombay) following decision of Hon’ble Supreme Court of India in the case of Pandian Chemicals Ltd. vs. CIT [2003] 262 ITR 278 has held that interest income earned by the assessee on fixed deposits with the bank and other interest income were eligible for deduction u/s 80IA.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
