Deepak Pandurang Gadre, Ratnagiri v. Dy.CIT, Ratnagiri Cir. Ratnagiri, Ratnagiri

ITA 225/PUN/2007 | 2003-2004
Pronouncement Date: 31-01-2011 | Result: Allowed

Appeal Details

RSA Number 22524514 RSA 2007
Assessee PAN ABHPG2085K
Bench Pune
Appeal Number ITA 225/PUN/2007
Duration Of Justice 3 year(s) 11 month(s) 22 day(s)
Appellant Deepak Pandurang Gadre, Ratnagiri
Respondent Dy.CIT, Ratnagiri Cir. Ratnagiri, Ratnagiri
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 31-01-2011
Assessment Year 2003-2004
Appeal Filed On 08-02-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER ITA NO. 225/PN/07 (ASSTT YEAR: 2003-04) DEEPAK PANDURANG GADRE PROP. GARE MARINE EXPORT .. APP ELLANT RATNAGIRI PAN ABHPG2085K VS. DY. COMMISSIONER OF INCOME-TAX RATNAGIRI CIR. RATNAGIRI .. RESPONDENT APPELLANT BY : SHRI NIKHIL PATHAK RESPONDENT BY : SHRI SANTOSH KUMAR ORDER PER G.S. PANNU A.M: THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) KOLHAPUR DATE D 15.11.2006 WHICH IN TURN HAS ARISEN FROM AN ORDER DATED 27.1 2..2005 PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOM E-TAX ACT 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2003-04. 2. IN THIS APPEAL THE SOLITARY GRIEVANCE OF THE A SSESSEE IS AGAINST ACTION OF THE LOWER AUTHORITIES IN EXCLUDIN G INCOME EARNED BY WAY OF INTEREST ON SHORT TERM DEPOSITS WITH THE BANK FO R THE PURPOSES OF COMPUTING DEDUCTION UNDER SECTION 10B OF THE ACT. ITA NO225/PN/07 SHRI DEEPAK P GADRE RATNAGIRI 2 3. IN BRIEF THE FACTS ARE THAT THE ASSESSEE IS A PROPRIETOR OF A 100% EXPORT ORIENTED UNDERTAKING (EOU). THE ASSESSE E IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF SURIMI A P RODUCT MADE FROM FISH AND IS UNDERTAKING EXPORTS. FOR THE YEAR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 2003-04 ASSESSEE FILED A RETURN OF INCOME AT RS 2 07 90 920/-. IN THE RETURN OF INCOME ASSESSEE HA D CLAIMED DEDUCTION UNDER SECTION 10B OF THE ACT AT RS 17 38 53 807/-. IN THE ASSESSMENT PROCEEDINGS ASSESSING OFFICER NOTED THAT ASSESSEE HAD INCLUDED A SUM OF RS 73 45 624/- REPRESENTING INTEREST ON SHORT TE RM DEPOSITS WITH BANK FOR THE PURPOSES OF COMPUTING DEDUCTION UNDER SECTI ON 10B OF THE ACT. ON BEING ASKED TO SHOW CAUSE AS TO WHY THE DEDUCTION S HOULD NOT BE DENIED ON SUCH INCOME AS THE SAME WAS NOT DERIVED FROM THE EXPORT OF SEA FOOD THE ASSESSEE CONTENDED THAT THE SURPLUS FUNDS OF TH E UNDERTAKING WERE TEMPORARILY PARKED IN SHORT TERM DEPOSITS WITH THE BANK AND THE SAME WERE KEPT READY FOR MEETING THE BUSINESS REQUIREME NTS. IT WAS POINTED OUT THAT THE ONLY BUSINESS OF THE ASSESSEE WAS EXPO RT OF PRODUCTS MANUFACTURED BY THE EOU AND THEREFORE THE ENTIRE PROFITS AND GAINS OF THE BUSINESS OF THE EOU CONSTITUTED INCOME OF THE U NDERTAKING FROM EXPORT OF ARTICLES OR THINGS. THE ASSESSEE ALSO REF ERRED TO THE PROVISIONS OF SECTION 80HHC OF THE ACT WHICH ALSO PRESCRIBED THE METHOD OF COMPUTATION OF PROFITS DERIVED FROM EXPORT IN SECTI ON 80HHC(3)(A) WHICH WAS ALSO THE CASE IN SECTION 10B(4) OF THE ACT.. I T WAS EXPLAINED THAT WHEREAS BY WAY OF EXPLANATION (BAA) IN SECTION 80HH C A PRESCRIBED PERCENTAGE OF INTEREST WAS EXCLUDIBLE FROM THE PRO FITS OF BUSINESS WHILE IT WAS NOT SO PRESCRIBED IN SECTION 10B OF THE ACT. TH EREFORE INTEREST INCOME WHICH CONSTITUTED BUSINESS PROFITS OF THE EO U COULD NOT BE EXCLUDED FROM THE PURVIEW OF SECTION 10B HAVING RE GARD TO THE METHOD OF ITA NO225/PN/07 SHRI DEEPAK P GADRE RATNAGIRI 3 COMPUTATION OF PROFITS DERIVED FROM BUSINESS PROVID ED IN SECTION 10B(4) OF THE ACT. THE ASSESSEE ALSO CONTENDED THAT SIMILAR I NCOME HAD ARISEN IN THE ASSESSMENT YEAR 1996-97 WHEREIN CLAIM OF THE AS SESSEE FOR DEDUCTION UNDER SECTION 10B WAS ACCEPTED BY THE ASSESSING OFF ICER. IN THE ALTERNATIVE ASSESSEE CONTENDED THAT ONLY THE NET AMOUNT OF INTEREST INCOME AFTER SETTING OFF INTEREST PAID TO THE BANK S SHOULD BE EXCLUDED FROM THE PURVIEW OF SECTION 10B FOLLOWING THE DECIS ION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF HONDA SIEL POWER PRO DUCTS LTD V. DCIT 77 ITD 123 (DEL). THE ASSESSING OFFICER DID NOT ACCEPT THE PLEAS OF THE ASSESSEE AS ACCORDING TO HIM INTEREST ON SHORT TE RM DEPOSITS OF THE EOU CANNOT BE TREATED AS INCOME DERIVED FROM EXPORT OF SEA FOOD AND THEREFORE THE SAME WAS EXCLUDIBLE FOR THE PURPOSES OF COMPUTING DEDUCTION UNDER SECTION 10B OF THE ACT. THE ALTERNA TIVE PLEA OF THE ASSESSEE FOR EXCLUDING ONLY THE NET AMOUNT OF INTER EST WAS ALSO NOT ACCEPTED. ACCORDINGLY INCOME BY WAY OF INTEREST ON SHORT TERM DEPOSITS FROM BANK AMOUNTING TO RS 73 45 624/- WAS EXCLUDED FOR THE PURPOSES OF COMPUTING DEDUCTION UNDER SECTION 10B OF THE ACT AN D THE SAME WAS ASSESSED AS INCOME FROM OTHER SOURCES. THE ASSESS EE CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONER OF INCOME- TAX (APPEALS). 4. BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS) IT WAS CONTENDED BY THE ASSESSEE THAT THE SURPLUS FUNDS OF THE UNDERTAKING WHICH WERE LYING IDLE TEMPORARILY WERE PLACED IN SH ORT TERM DEPOSITS TO MAXIMIZE PROFITS. IT WAS FURTHER ARGUED THAT THE AS SESSING OFFICER FAILED TO APPRECIATE THAT EVEN IN CASE OF DEDUCTION UNDER SEC TION 80HHC WHERE THE TERM EXPORT PROFITS IS NARROWER THAN IN SECTION 1 0B INTEREST AND OTHER INCOME WERE CONSIDERED AS ELIGIBLE FOR DEDUCTION TO THE EXTENT PROVIDED IN THE SECTION. IT WAS ALSO SUBMITTED BY THE ASSESSEE BEFORE THE ITA NO225/PN/07 SHRI DEEPAK P GADRE RATNAGIRI 4 COMMISSIONER OF INCOME-TAX (APPEALS) THAT IN SECTIO N 80HHC SPECIFIC EXCLUSIONS HAVE BEEN MENTIONED FROM TOTAL TURNOVER AND PROFITS OF THE BUSINESS AND IN THE ABSENCE OF SUCH SPECIFIC EXCL USION IN SECTION 10B IT SHOULD BE CONSTRUED THAT THIS SECTION DOES NOT WARR ANT ANY SUCH EXCLUSION. ALTERNATIVELY IT WAS ARGUED THAT INTEREST PAID BY THE UNDERTAKING ON WORKING CAPITAL LOANS BE SET OFF AND ONLY NET INTER EST INCOME BE BROUGHT TO TAX. THE COMMISSIONER OF INCOME-TAX (APPEALS) UPHEL D THE STAND OF THE ASSESSING OFFICER THAT THE INTEREST INCOME IS NOT E LIGIBLE FOR DEDUCTION UNDER SECTION 10B OF THE ACT. HOWEVER HE ALLOWED T HE ALTERNATIVE PLEA OF THE ASSESSEE THAT INTEREST PAID OF RS 41 37 306/- IS TO BE REDUCED FROM THE TOTAL INTEREST INCOME OF RS 76 23 795/- AND ONL Y THE BALANCE OF RS 34 86 489/- IS LIABLE TO BE EXCLUDED FOR THE PURPOS E OF COMPUTING DEDUCTION UNDER SECTION 10B OF THE ACT. NOT BEING S ATISFIED WITH THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) ASSESS EE IS IN FURTHER APPEAL BEFORE US. 5. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LOWER AUTHORITIES HAVE ERRED IN HOLDING THAT INTERE ST INCOME FROM SHORT- TERM DEPOSITS WITH BANK WAS NOT ELIGIBLE FOR DEDUCT ION UNDER SECTION 10B OF THE ACT. IT IS CONTENDED THAT THE IDLE FUNDS OF THE BUSINESS OF THE 100% EOU WERE PLACED IN SHORT TERM DEPOSITS WITH THE BAN K WHICH YIELDED INTEREST INCOME. THE SAID INVESTMENT WAS MADE FOR A SHORT PERIOD WHILE AT THE SAME TIME SUCH FUNDS WERE KEPT READY FOR THE R EQUIREMENTS OF THE BUSINESS; AND THE ONLY BUSINESS OF THE ASSESSEE BE ING EXPORT OF GOODS MANUFACTURED BY THE EOU AND THUS THE SAID INCOME IS ASSESSABLE AS BUSINESS INCOME AND NOT AS INCOME FROM OTHER SOU RCES AS HELD BY THE ASSESSING OFFICER. IN THIS CONNECTION RELIANCE WAS PLACED ON A DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF KATAR IA SHEWANI ITA NO225/PN/07 SHRI DEEPAK P GADRE RATNAGIRI 5 DEVELOPERS PUNE V DY. CIT ITA NO 1549/PN/07 DATED 23.7.2010.THE TRIBUNAL IN THE CASE OF KATARIA SHEWANI DEVELOPERS PUNE V DY. CIT (SUPRA) HELD A SIMILARLY-EARNED INTEREST INCOME TO BE ASSESSABLE AS BUSINESS INCOME FOLLOWING THE DECISION OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT V LOK HOLDINGS 308 ITR 356 (BOM) . RELIANCE WAS ALSO PLACED ON THE DECISIONS OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V PARAMOUNT PREMISES (P) LTD 190 ITR 259 (BOM) SREEKRISHNA POLYSTER LTD V DY. CIT 274 ITR 21 (BOM). APART THER EFROM RELIANCE WAS ALSO PLACED ON THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF J P MORGAN SERVICES INDIA (P) LTD. V. DY. C IT 33 SOT 327 (MUM) WHEREIN IN THE CONTEXT OF A CLAIM UNDER SECTION 10A OF THE ACT INTEREST ON FIXED DEPOSITS WAS HELD TO BE ASSESSABLE AS PART OF THE PROFITS OF BUSINESS. IN THIS BACKGROUND THE LEARNED COUNSEL POINTED OUT THAT THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF ACIT V MOTOROL A INDIA ELECTRONICS (P) LTD 112 TTJ 562 (BANG) HAS HELD THAT INTEREST INCOM E IS ELIGIBLE FOR DEDUCTION U/S 10B OF THE ACT AND THE SAID DECISION CLEARLY COVERS THE CONTROVERSY IN QUESTION. 6. ON THE OTHER HAND THE LEANED DEPARTMENTAL REPRE SENTATIVE HAS DEFENDED THE ACTION OF THE LOWER AUTHORITIES BY POI NTING OUT THAT INTEREST INCOME PER SE CANNOT BE TREATED AS BUSINESS INCOME SO AS TO QUALIFY FOR DEDUCTION UNDER SECTION 10B OF THE ACT. THE LEANED DEPARTMENTAL REPRESENTATIVE POINTED OUT THAT IN THE CASE OF CIT V MENON IMPEX (P) LTD. 259 ITR 403 (MAD) INTEREST ON FIXED DEPOSITS HAS N OT BEEN FOUND ELIGIBLE FOR DEDUCTION UNDER SECTION 10A OF THE ACT AND THE REFORE SIMILAR REASONING SHOULD PREVAIL IN THE PRESENT CASE ALSO. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY. IN THIS CASE UNDISPUTABLY THE APPELLANT IS AN INDIVIDUAL WHO IS RUNNING A 100% EOU ITA NO225/PN/07 SHRI DEEPAK P GADRE RATNAGIRI 6 ENGAGED IN EXPORT OF SEA FOOD; AND CLAIMED DEDUCTI ON UNDER SECTION 10B OF THE ACT IN RELATION TO THE PROFITS AND GAINS OF THE EOU. IN PRINCIPLE ASSESSEE HAS BEEN HELD ELIGIBLE FOR CLAIM OF DEDUCT ION UNDER SECTION 10B OF THE ACT. HOWEVER WITH RESPECT TO THE INTEREST O N SHORT TERM DEPOSITS WITH BANKS ASSESSEE HAS BEEN HELD INELIGIBLE FOR C LAIM OF THE DEDUCTION UNDER SECTION 10B OF THE ACT PRIMARILY FOR THE REAS ON THAT SUCH INCOME IS ASSESSABLE AS INCOME FROM OTHER SOURCES; AND SUC H INCOME IS NOT DERIVED FROM THE BUSINESS OF EXPORT OF SEA FOOD. 8. SECTION 10B OF THE ACT AS IT STOOD FOR THE ASSE SSMENT YEAR UNDER CONSIDERATION PROVIDED FOR DEDUCTION OF SUCH PROFI T AND GAINS AS ARE DERIVED BY 100% EOU FROM THE EXPORT OF ARTICLE OR T HINGS. SUB-SECTION 4 OF SECTION 10B PRESCRIBES THAT THE PROFITS DERIVED FRO M EXPORT OF ARTICLE OR THINGS SHALL BE THE AMOUNT WHICH BEARS TO THE PROFI T OF THE UNDERTAKING THE SAME PROPORTION AS THE EXPORT TURNOVER BEARS TO THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE UNDERTAKING. IT ONLY NEE DS TO BE NOTED THAT SUB-SECTION (1) OF SECTION 10B PRESCRIBES A DEDUCTI ON FOR SUCH PROFITS AND GAINS AS ARE DERIVED BY A HUNDRED PER CENT EXPO RT-ORIENTED UNDERTAKING FROM THE EXPORT OF ARTICLES OR THINGS . AND SUB-SECTION (4) OF SECTION 10B PRESCRIBES THE METHODOLOGY TO COMPUTE T HE PROFITS DERIVED FROM EXPORT OF ARTICLES OR THINGS FOR THE PURPOSES OF SUB-SECTION (1) OF SECTION 10B. IN THIS BACKGROUND WE MAY NOW EXAMIN E THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 10B OF THE ACT IN RELATION TO THE IMPUGNED INCOME. 9. HAVING PERUSED THE DECISION OF OUR CO-ORDINATE B ENCH IN THE CASE OF KATARIA SHEWANI DEVELOPERS V DY. CIT (SUPRA) INT EREST INCOME IN QUESTION IS LIABLE TO BE ASSESSED AS BUSINESS INCOM E. THE TRIBUNAL FOLLOWED THE PARITY OF REASONING LAID DOWN BY THE H ONBLE BOMBAY HIGH ITA NO225/PN/07 SHRI DEEPAK P GADRE RATNAGIRI 7 COURT IN THE CASE OF CIT V LOK HOLDINGS (SUPRA) AND ALSO THE JUDGMENTS OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V SREEKRISHNA POLYSTER LTD V DY. CIT (SUPRA) AND CIT V PARAMOUNT PREMISES (P) LTD (SUPRA) IN COMING TO ITS CONCLUSION. IN TERMS OF THE AFORESAI D JUDGMENTS THE PREMISE DRAWN UP BY OUR CO-ORDINATE BENCH IS THAT DEPOSIT O F SURPLUS MONEY WITH BANK WAS TO BE REGARDED AS AN ACTIVITY IN THE COURS E OF BUSINESS AND THE INTEREST ACCRUING THEREFROM IS TO BE REGARDED AS AR ISING IN THE COURSE OF BUSINESS ACTIVITY AND SUCH INCOME WAS ASSESSABLE A S BUSINESS INCOME. SIMILARLY IN THE CASE OF J P MORGAN SERVICES INDIA (P) LTD. (SUPRA) INTEREST ON FIXED DEPOSITS TAKEN OUT BY DEPOSITING BUSINESS PROCEEDS WAS CONSIDERED AS PART OF THE PROFITS AND GAINS OF THE BUSINESS OF THE ASSESSEE FOLLOWING THE JUDGMENT OF THE HONBLE JUR ISDICTIONAL HIGH COURT IN THE CASE OF CIT V LOK HOLDINGS (SUPRA). THE TRIB UNAL ALSO HELD THAT SUCH INTEREST INCOME WAS ELIGIBLE FOR CLAIM OF DEDUCTION UNDER SECTION 10A OF THE ACT. FOLLOWING THE AFORESAID PRECEDENTS THE IM PUGNED INTEREST INCOME FROM SHORT TERM DEPOSIT WITH BANK IS ASSESSABLE AS BUSINESS INCOME HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. 10. IN SO FAR AS THE CLAIM OF DEDUCTION UNDER SECTI ON 10B ON SUCH INCOME IS CONCERNED IN OUR VIEW THE ORDER OF THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF ACIT V MOTOROLA INDIA ELECT RONICS (P LTD) (SUPRA) COVERS THE CONTROVERSY. IN THE CASE BEFORE THE BANG ALORE BENCH THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 10B ON INT EREST EARNED ON DEPOSITS HELD IN EEFC ACCOUNT AND INTER-CORPORATE L OANS ADVANCED BY THE ASSESSEE TO ITS SISTER CONCERNS. SUCH INCOME WAS HE LD ASSESSABLE AS BUSINESS INCOME AND ELIGIBLE FOR CLAIM OF DEDUCTION UNDER SECTIONS 10A/10B OF THE ACT. IN COMING TO SUCH CONCLUSION T HE BENCH HAS SPECIFICALLY NOTED THE RELEVANT PROVISIONS OF SECTI ON 10B AS IT STOOD FOR ITA NO225/PN/07 SHRI DEEPAK P GADRE RATNAGIRI 8 ASSESSMENT YEAR 2003-04. FOLLOWING DISCUSSION BY TH E TRIBUNAL IN THE HEAD NOTE IS WORTHY OF NOTICE: COMING TO THE ASSESSMENT YEAR 2001-02 THE ACT HAS UNDERGONE A CHANGE. SEC. 10B HAS UNDERGONE A CHANGE. EARLIER IT WAS AN EXEM PTION SECTION AND INCOME FROM THESE UNDERTAKINGS WHICH ARE COVERED BY THIS S ECTION DID NOT FORM PART OF TOTAL INCOME. FROM THIS PARTICULAR YEAR THOUGH THE SECTION APPEARS IN CHAPTER III WHICH CLASSIFIES INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME A DEDUCTION FROM BUSINESS INCOME FROM THE UNDERTAKING IS GRANTED BY INCLUDING THE SPECIAL PROVISION. ANOTHER IMPORTANT FEATURE IN SUB-S.(4) O F SEC. 10B IS THAT THE METHODOLOGY OF ARRIVING AT THE EXPORT PROFITS OF TH E BUSINESS OF THE UNDERTAKING IS GIVEN IN A FORMULA AS IN THE CASE OF SECTION 80HHC . THE TERMINOLOGY USED IN SUB-S. (4) OF SEC. 10B IS PROFITS OF THE BUSINESS OF THE UNDERTAKING IN CONTRADISTINCTION TO THE WORDS PROFITS AND GAINS D ERIVED BY THE ASSESSEE FROM A 100 PER CENT EXPORT ORIENTED UNDERTAKING. THE TERM FROM THE BUSINESS OF IS MUCH WIDER THAN THE TERM DERIVED FROM INDUSTRIAL U NDERTAKING. KEEPING THIS DISTINCTION IN MIND THE ENTIRE PROFITS DERIVED FRO M THE BUSINESS OF UNDERTAKING SHOULD BE TAKEN INTO CONSIDERATION WHILE COMPUTING THE ELIGIBLE DEDUCTION UNDER SECTION 10B/10A BY APPLYING THE MANDATORY FORMULA. IF THE LEGISLATURE INTENDED TO EXCLUDE INTEREST FROM THE TERM PROFITS OF BUSIN ESS OF UNDERTAKINGS UNDER SEC. 10A/10B A SIMILAR PROVISION AS IN THE CASE OF EXPL ANATION (BAA) TO SEC.80HHC WOULD HAVE BEEN INSERTED. NO SUCH EXPLANATION HAS B EEN INTRODUCED IN SEC. 10A/10B. THUS THE AO IS DIRECTED TO RECOMPUTE THE DEDUCTION UNDER SECTIONS 10A AND 10B ON THE LINES INDICATED ABOVE FOR THE AS SESSMENT YEAR 2001-02. 180 CTR (MAD) 40 : (2003) 259 ITR 403 (MAD) AND (2003) 179 CTR (MAD) 522 : (2003) 260 ITR 304 (MAD) DISTINGUISHED. 11. FOLLOWING THE AFORESAID PARITY OF REASONING WH ICH IS FULLY APPLICABLE IN THE INSTANT CASE WE HEREBY HOLD THAT THE ASSESS EE IS ELIGIBLE FOR CLAIM OF DEDUCTION UNDER SECTION 10B IN RELATION TO INTER EST INCOME EARNED ON SHORT TERM DEPOSITS WITH THE BANK. ACCORDINGLY WE SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEDUCTION UNDER SEC. 10B IN RELATION TO INTEREST INCOME EARNED ON SHORT TERM DEPOSITS WITH THE BANK 12. BEFORE PARTING WE MAY REFER TO THE RELIANCE PL ACED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF MENON IMPEX (P) LTD (SUPRA). W E HAVE PERUSED THE SAID DECISION ANDS FIND THAT THE SAME HAS BEEN REND ERED IN THE CONTEXT OF SECTION 10A AS IT EXISTED IN THE ASSESSMENT YEAR 19 85-86. THE AMENDMENT TO SECTION 10B NOTED BY THE BANGALORE BE NCH IN THE CASE OF ACIT V MOTOROLA INDIA ELECTRONICS (P LTD) (SUPRA) W ITH EFFECT FROM ASSESSMENT YEAR 2001-02 MAKES THE JUDGMENT OF THE HONBLE MADRAS ITA NO225/PN/07 SHRI DEEPAK P GADRE RATNAGIRI 9 HIGH COURT INAPPLICABLE TO THE CONTROVERSY BEFORE U S WHICH RELATES TO ASSESSMENT YEAR 2003-04 I.E. AFTER THE AMENDMENT I N SECTION 10B. HERE THE SAID JUDGMENT DOES NOT HELP THE REVENUE IN RELA TION TO THE PROVISIONS OF SECTION 10B AS IT STOOD FOR THE ASSESSMENT YEAR BEFORE US. 13. RESULTANTLY APPEAL OF THE ASSESSEE IS ALLOWED AS ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS 31ST DAY OF J ANUARY 2011. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G.S. PA NNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 31ST JANUARY 2011 COPY TO:- 1) SHRI DEEPAK P GADRE RATNAGIRI 2) THE DY. CIT RATNAGIRI CIR. RATNAGIRI 3) THE CIT (A) KOLHAPUR 4) THE CIT KOLHAPUR 5) THE DEPARTMENTAL REPRESENTATIVE A BENCH I .T.A.T. PUNE. BY ORDER TRUE COPY ASST. REGISTRAR I.T.A.T. PUNE B