Treatment of interest income for deduction u/s 10B of Income Tax Act, 1961

Universal Precision Screws Vs JCIT (ITAT Delhi) The assessee received interest on FDRs amounting to Rs. 16,01,196/-. On being called upon to explain as to how this amount was eligible for deduction u/s 10B, the assessee stated that the interest on FDR was received on ‘margin kept in the bank for utilization of Letter of Credit (L/C) and bank guarantee limits from bank.’ Unconvinced with the assessee’s submissions, the AO treated such interest as income from other sources and did not allow deduction u/s 10B on it. The ld. CIT(A) echoed the assessment order on this point. 7. Af...