Genpact India Pvt. Ltd. Vs ACIT (OSD) (ITAT Delhi)
ITAT Delhi held that interest income from fixed deposits and loans given to employees is eligible for claiming benefit under section 10AA of the Income Tax Act. Accordingly, AO allowed to claim deduction u/s. 10AA and appeal of assessee allowed.
Facts- The assessee is engaged in the business of providing various types of business process outsourcing services including finance and accounting, collections, insurance, customer fulfillment, data modeling and analytics support, managed IT services, software solutions and e-learning.
AO treated the interest from fixed deposits as “Income from other Sources” and held that the source is not eligible for deduction u/s 10AA of the Act and further reduced the amount of Telecommunication expenses and Recovery expenses in respect of migration / on-the-job-training services from the export turnover.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Hon’ble High Court of Karnataka in the case of Hewlett Packard Global Soft Ltd it is held that all Profits and Gains of the Undertaking including the incidental income by way of interest on Bank Deposits or Staff loans would be entitled to 100% exemption or deduction under Section 10-A and 10-B of the Act. Such interest income arises in the ordinary course of export business of the Undertaking even though not as a direct result of export but from the Bank Deposits etc., and is therefore eligible for 100% deduction.
