Lovlesh Jain, New Delhi v. ACIT, New Delhi

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D: NEW DELHI BEFORE SHRI C.L. SETHI JUDICIAL MEMBER & SHRI SHAMIM YAHYA ACCOUNTANT MEMBER ITA NO. 4725/DEL/2009 ASSESSMENT YEARS : 2006-07 LOVLESH JAIN C-1/3 MODEL TOWN NEW DELHI. VS. ACIT CIRCLE 20(1) NEW DELHI. PAN: AAHPS 9311 B APPELLANT RESPONDENT APPELLANT BY : SHRI AJAY VOHRA ADVOCATE SHRI ROHIT JAIN CA RESPONDENT BY : SHRI ANOOP KUMAR SINGH SR. DR O R D E R PER: C.L. SETHI J.M. THIS PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 01.10.2009 PASSED BY THE LD. CIT(A) IN THE MA TTER OF AN ASSESSMENT MADE BY THE AO U/S. 143(3) OF THE INCOME TAX ACT 1 961 (THE ACT) FOR THE A.Y. 2006-07. 2. THE MAIN ISSUE RAISED BY THE ASSESSEE IN THE APP EAL IS AS TO WHETHER THE CIT(A) WAS JUSTIFIED IN UPHOLDING THE ACTION OF THE AO IN ASSESSING THE INTEREST INCOME AMOUNTING TO RS. 44 36 745/- EARNED ON FDR AS INCOME FROM OTHER SOURCES AND NOT AS BUSINESS INCOME A S CLAIMED BY THE ASSESSEE AND IN DENYING THE DEDUCTION U/S. 10A OF THE ACT IN RESPECT OF THE SAID INTEREST INCOME EARNED ON FDR. ITA NO. 4725/DEL/2009 2 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUF ACTURING AND EXPORT OF GOLD JEWELLERY AT THE NOIDA SEZ. IN THE PROFIT & LOSS ACCOUNT THE ASSESSEE HAD CREDITED SUM OF RS. 44 36 745/- AS BAN K INTEREST AND TREATED THE SAME TO BE EXPORT PROFIT FOR THE PURPOSE OF CLAIMIN G DEDUCTION U/S. 10A OF THE ACT. ON BEING ASKED BY THE AO AS TO WHY THIS I NTEREST ON FDRS SHOULD NOT BE TREATED AS INCOME FROM OTHER SOURCES THE AS SESSEE REPLIED THAT HE HAD EARNED INTEREST ON FDRS WHICH ARE EITHER USED FOR OBTAINING BANK GUARANTEE AND FOR TAKING OVERDRAFT LIMIT FOR THE PURPOSES OF THE BUSINESS AND THUS THE INTEREST SO EARNED IS ELIGIBLE FOR DEDUCTION U/S. 1 0A OF THE ACT. HOWEVER THE AO REJECTED THE ASSESSEES PLEA AND ON THE FACTS OF THE PRESENT CASE HE HELD THAT INTEREST INCOME ON FDRS IS ASSESSABLE UNDER TH E HEAD INCOME FROM OTHER SOURCES AND IT DOES NOT QUALIFY FOR DEDUCT ION U/S. 10A OF THE ACT. 4. BEING AGGRIEVED WITH THE AOS ORDER THE ASSESSE E PREFERRED AN APPEAL BEFORE THE LD. CIT(A). 5. BEFORE THE LD. CIT(A) THE ASSESSEE CONTENDED TH AT THE FDRS WERE MADE OUT OF THE FUNDS GENERATED FROM THE BUSINESS O PERATION OF SEZ UNIT AND KEPT AS SECURITY FOR AVAILING VARIOUS CREDIT FACILI TIES AND BANK GUARANTEE AS PER NECESSITY OF THE BUSINESS COMPULSION. IT WAS F URTHER SUBMITTED THAT THE FDR WERE CREDITED OUT OF BUSINESS FUND AND NOT OUT OF SURPLUS FUND OF THE ASSESSEE AND WERE KEPT AS SECURITY FOR AVAILING VA RIOUS LOAN FACILITIES NOT BY CHOICE BUT OF COMPULSION. IT WAS THUS CONTENDED THAT THE INTEREST EARNED ON ITA NO. 4725/DEL/2009 3 SUCH FDRS WAS NECESSARILY IN THE NATURE OF BUSINESS INCOME ELIGIBLE FOR DEDUCTION U/S. 10A OF THE ACT. THE FOLLOWING JUDGM ENTS WERE RELIED UPON BY THE ASSESSEE IN RESPECT OF THE ASSESSEES CONTEN TION:- I. SNAM PROGETTI SPA VS. ADDL. CIT 132 ITR 70 (DEL. ) II. CIT VS. KOSHIKA TELECOM LTD. 287 ITR 479 (DEL.) III. CIT VS. A.Z. NIZAR AHMED & CO. 259 ITR 244 (MA D.) IV. RAJEEV ENTERPRISES VS. A.O. 261 ITR (AT) 34 V. CIT VS. CHINA NACHIMUTHU CONSTRUCTIONS 297 ITR 7 0/170 TAXMAN 272 (KAR.) VI. CIT VS. INDO SWISS JEWELS LTD. 205 CTR 158 (MUM .) VII. SAMTEX FASHIONS LTD. VS. ACIT 92 ITD 535 (DEL. ) VIII. ACIT VS. MOTOROLA INDIA ELECTRONICS (P) LTD. 114 ITD 387/112 TTJ 562 (BANG.) ETC. 6. IT WAS FURTHER CONTENDED BY THE ASSESSEE BEFORE THE LD. CIT(A) THAT THE TERM USED IN FORMULA PRESCRIBED IN SECTION 10A(4) I S PROFIT OF THE BUSINESS OF UNDERTAKING AND NOT THE PROFIT DERIVED FROM UN DERTAKING AND THUS THE LANGUAGE SO USED IN SECTION 10A(4) IS MUCH WIDER TO INCLUDE ALL BUSINESS PROFIT OF THE UNDERTAKING. IT WAS FURTHER POINTED OUT THAT THERE IS NO PROVISION IN SECTION 10A SIMILAR TO EXPLANATION (BA A) OF SECTION 80HHC REQUIRING AN EXCLUSION OF INTEREST INCOME FROM THE BUSINESS PROFIT FOR THE PURPOSE OF COMPUTING DEDUCTION U/S. 10A OF THE ACT. 7. AFTER CONSIDERING THE AOS ORDER AND THE SUBMISS ION OF THE ASSESSEE AND ANALYZING PROVISIONS OF SECTION 10A OF THE ACT THE LD. CIT(A) HELD THAT THE INTEREST INCOME ON FDRS EARNED BY THE ASSESSEE IS NOT A PROFIT FROM ITA NO. 4725/DEL/2009 4 BUSINESS OF ELIGIBLE UNDERTAKING BUT IS A PROFIT WH ICH IS ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES. THE ORDER OF THE CIT(A) RUNS AS UNDER:- DETERMINATION 6. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND SUBMISSIONS MADE BY THE APPELLANT. THE RATIO OF JU DGMENTS QUOTED ABOVE MAY NOT BE OF MUCH HELD AS THERE ARE D IVERSE VIEWS ON THE SUBJECT AS PER OTHER JUDGMENTS. MOREO VER THEIR FACTS ARE NOT SIMILAR TO THE FACTS OF THIS CASE. THE APPELLANT HAD EARNED INTEREST ON FDR WHICH IS OUT OF SURPLUS FUND. THIS IS INCONSEQUENTIAL AS TO HOW THE SURPLUS FUND HAD BEEN GENERATED. THE FDRS MIGHT HA VE BEEN USED FOR THE PURPOSE OF OBTAINING BANK GUARANTEE OR OVERDRAFT FACILITIES NEVERTHELESS THE NATURE OF INCOME ARIS ING OUT OF SUCH DEPOSIT CANNOT BE TERMED AS EXPORT PROFIT. THE EXP ORT TURNOVER HAS BEEN DARNED FOR THE PURPOSE OF THIS SECTION- EXPORT TURNOVER MEANS THE CONSIDERATION IN RESPECT OF EXPORT (BY THE UNDERTAKING) OF ARTICLE OR THINGS RE CEIVED IN OR BROUGHT INTO INDIA BY THE ASSESSEE IN CONVERTIB LE FOREIGN EXCHANGE ------------. THE WORDINGS OF SECTION 10A UNDER UNEQUIVOCALLY STIPULATES A DIRECT LINK BETWEEN EXPO RT OF GOODS AND DEDUCTION FROM THE TOTAL INCOME . 10A(1) SUBJECT TO THE PROVISIONS OF THE SECTION A DEDUCTION OF SUCH PROFIT AND GAINS AS ARE DERIVED B Y AN UNDERTAKING FROM THE EXPORT OF ARTICLE OR THINGS OR COMPUTER SOFTWARE FOR A PERIOD OF 10 CONSECUTIVE ASSESSMENT YEARS SHALL BE ALLOWED FROM THE TOTAL INCOME OF THE ASSESSEE. 7. IT IS VERY CLEAR THAT DEDUCTION IS IN RESPECT OF PROFIT WHICH EMANATES FROM EXPORT TURNOVER IN CONVERTIBLE FOREIGN EXCHANGE AND THIS CANNOT BE EXTENDED TO DOMESTIC EA RNING ON FDRS IN RUPEES. THE EARNING OF INTEREST IS NOT DIR ECTLY LINKED TO THE BUSINESS OF EXPORT BUT INCIDENTAL TO IT. THE L EGISLATURES DID NOT INTEND TO ALLOW DEDUCTION ON INCIDENTAL ACTIVIT Y. IN THE CASE OF CIT VS. SHREE RAM HONDA POWER EQUIPMENT & ORS. ( 2007) 289 ITR 0475 IT HAS BEEN HELD THAT WERE SURPLUS FU NDS ARE ITA NO. 4725/DEL/2009 5 PARKED WITH THE BANK AND INTEREST IS EARNED THEREON IT CAN ONLY BE CATEGORIZED AS INCOME FROM OTHER SOURCES AND NOT AS PROFIT AND GAINS OF BUSINESS AND PROFESSION. THIS RECEIPT MERIT SEPARATE TREATMENT U/S. 56 WHICH IS OUTSIDE THE RIN G OF PROFITS AND GAIN FROM BUSINESS OF PROFESSION. INTEREST EAR NED ON FIXED DEPOSITS MADE FOR THE PURPOSES OF AVAILING CREDIT F ACILITIES FROM THE BANK ALSO DOES NOT HAVE AN IMMEDIATE NEXUS WITH THE EXPORT BUSINESS DOES NOT QUALIFY FOR THE DEDUCTION U/S. 80 HHC. THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT OF DELHI SETTLED THE ISSUE THAT INTEREST INCOME ON FDR CANNOT BE TREATED AS EXPORT PROFIT. A SIMILAR VIEW WAS HELD BY THE HONBLE SC IN URBAN STANISLAUS CO. VS. CIT (CONFIRMED DECISION OF KERAL A HIGH COURT 263 ITR 10) THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. MENON IMPEX PVT. LTD. (200) 259 ITR 403 (MAD.) AND IN RENAISSANCE JEWELLERY (P) LTD. VS. ITO (2005 ) 4 SOT 50 (MUM.). IT WAS HELD IN THE CASE OF CIT VS. MENON I MPEX PVT. LTD. THAT INTEREST INCOME FROM THE FUNDS IN CONNECT ION WITH LETTER OF CREDIT IS NOT EXEMPT AS THIS IS NOT INC OME DERIVED FROM THE PROFITS OF THE BUSINESS OF INDUSTRIAL UNDE RTAKING SO AS TO BE ENTITLED TO GET THE BENEFIT OF SECTION 10A. THE MERE FACT THAT THE DEPOSIT MADE WAS FOR THE PUR POSE OF OBTAINING LETTER OF CREDIT AND WHICH IN TURN USED F OR THE PURPOSES OF THE BUSINESS OF THE INDUSTRIAL UNDERTAK ING DOES NOT ESTABLISH A DIRECT NEXUS BETWEEN THE INTEREST AND T HE INDUSTRIAL UNDERTAKING. 8. CONCERNING THE ALLOWABILITY OF DEDUCTION OUT OF NETTING OF INTEREST THE CONTENTION OF THE APPELLAN T IS NOT ACCEPTED BECAUSE THE INTEREST EARNED IS UNDER THE H EAD INCOME FROM OTHER SOURCES AND NOT AS PROFIT AND GAINS OF E XPORT BUSINESS. IF THE INTEREST INCOME IS NOT PART OF TH E EXPORT PROFIT THEN THE QUESTION OF DEDUCTION OF INTEREST EXPENDIT URE OUT OF IT DOES NOT ARISE. IN VIEW OF ABOVE I CONFIRM THE ADDITION OF RS.44 36 745/- ON ACCOUNT OF DISALLOWANCE MADE U/S. 10A. 8. STILL AGGRIEVED THE ASSESSEE IS IN APPEAL BEFOR E US. 9. THE LD. COUNSEL FOR THE ASSESSEE SHRI AJAY VOHR A HAS SUBMITTED THAT THE BUSINESS FUND ACCUMULATED WITH THE ASSESSEE OUT OF PROFIT OF THE ITA NO. 4725/DEL/2009 6 UNDERTAKING EARNED FROM YEAR TO YEAR WERE DEPLOYED INTO THE FIXED DEPOSITS MADE WITH THE BANK WHICH IN TURN WERE KEPT AS BA NK GUARANTEE FOR OBTAINING BANK LOAN OR OVERDRAFT FACILITIES. HE FU RTHER POINTED OUT THAT THE TOTAL FDRS OF RS. 1.91 CRORES WERE GIVEN AS SECURIT Y FOR AVAILING OVERDRAFT LIMIT OF RS. 1.7 CRORES FROM THE BANK. HE THUS SUB MITTED THAT THE FDRS WERE MADE OUT OF FUNDS GENERATED FROM THE BUSINESS OPERA TION OF THE UNIT AND WERE KEPT AS SECURITY FOR AVAILING VARIOUS CREDIT F ACILITIES AND/OR BANK GUARANTEES AS A MATTER OF COMMERCIAL EXPEDIENCY/NEC ESSITY AND BUSINESS COMPULSION AND CONSEQUENTLY THE INTEREST INCOME E ARNED ON SUCH FDRS WOULD NECESSARILY BE IN THE NATURE OF BUSINESS INCO ME AND NOT INCOME FROM OTHER SOURCES. IN OTHER WORDS HE CONTENDED THAT S INCE THE FDRS WERE CREATED OUT OF BUSINESS FUNDS AND NOT OUT OF SURPLU S FUND OF THE ASSESSEE AND WERE KEPT AS DEPOSIT OR SECURITY FOR AVAILING VARIO US LOAN FACILITIES FROM BANK NOT OUT OF CHOICE BUT OUT OF BUSINESS COMPULS ION THE INTEREST EARNED ON SUCH FDRS IS THUS TO BE CATEGORIZED AS BUSINESS INCOME FOR THE PURPOSE OF COMPUTING DEDUCTION U/S. 10A OF THE ACT. IN THI S RESPECT THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE UPON THE VARIO US DECISIONS THAT WERE ALSO RELIED UPON BEFORE THE LD. CIT(A). 10. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTEN DED THAT THE FOLLOWING DECISIONS RELIED UPON THE BY THE AO AND THE CIT(A) ARE NOT APPLICABLE TO THE ITA NO. 4725/DEL/2009 7 ASSESSEES CASE IN AS MUCH AS IN THE ASSESSEES CA SE THE FDRS WERE MADE OUT OF BUSINESS FUND AND NOT OUT OF SURPLUS FUNDS. (I) CIT VS. SHRI RAM HONDA POWER EQUIPMENTS & ORS. (2007) 289 ITR 1475 (DEL.) (II) CIT VS. MENON IMPEX PVT. LTD. (2003) 259 ITR 4 03 (MAD.) (III) RENAISSANCE JEWELLERY PVT. LTD. VS. ITO (2005 ) 4 SOT 50 (MUM.) ITAT. 11. HE FURTHER SUBMITTED THAT THE DECISIONS RENDERE D IN THE CONTEXT OF SECTION 80HH/80J/80I ARE NOT APPLICABLE TO THE PRES ENT CASE IN AS MUCH AS THE LANGUAGE USED IN SECTION 10A OF THE ACT IS OF W IDER IMPORT THAN THE LANGUAGE USED IN SECTION 80HH/80J/80I OF THE ACT AS WOULD BE CLEAR FROM THE EXPRESSION USED IN SECTION 10A(4) WHERE THE EXP RESSION HAS BEEN USED AS PROFIT OF THE BUSINESS OF THE UNDERTAKING AND N OT AS PROFIT DERIVED FROM THE UNDERTAKING. TO ELABORATE THIS CONTENTION TH E LD. COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE LANGUAGE USED IN SECTION 10A(4) AS WELL AS IN SECTION 10A(1) IN CONTRADISTINCTION TO SECTIO N 80HH/80J/80I OF THE ACT. HE FURTHER CONTENDED THAT THERE IS NO DISPUTE WITH REGARD TO THE PROPOSITION THAT THE EXPRESSION DERIVED FROM INDUSTRIAL UNDERT AKING IN SECTION 80HH/80J/80I HAS BEEN USED BY THE STATUTE TO RESTRI CT THE DEDUCTIONS ONLY THOSE INCOME WHICH ARE DIRECTLY DERIVED FROM THE IN DUSTRIAL UNDERTAKING AND ITA NO. 4725/DEL/2009 8 NOT OTHER INCOMES WHICH ARE INCIDENTAL TO THE CARRY ING OF BUSINESS OF THE INDUSTRIAL UNDERTAKING. HOWEVER IN SECTION 10A(4) THE EXPRESSION USED IS PROFIT OF THE BUSINESS OF THE UNDERTAKING IMPLYING THEREBY DEDUCTION U/S. 10A IS NOT RESTRICTED ONLY TO THOSE INCOME WHICH AR E DIRECTLY DERIVED FROM THE UNDERTAKING BUT IT IS ALSO EXTENDED TO ALL OTH ER PROFIT OF THE BUSINESS OF THE UNDERTAKING. IN THIS CONTEXT HE FURTHER SUBMI TTED THAT THE EXPRESSION BUSINESS IS UNDOUBTEDLY IS OF A WIDER IMPORT AND A WIDER MEANING IS TO BE GIVEN TO IT RATHER THAN RESTRICTING IT TO ONLY PROF IT DERIVED FROM INDUSTRIAL UNDERTAKING. HE FURTHER SUBMITTED THAT IN ADDITION TO THE EXPRESSION PROFITS AND GAINS AS ARE DERIVED BY AN UNDERTAKING FROM THE EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE USED IN SUB-SECTION (1 ) OF SECTION 10A A FURTHER EXPRESSION IN SUB-SECTION (4) OF SECTION 10 A HAS BEEN USED RUNNING AS PROFITS OF THE BUSINESS OF THE UNDERTAKING. I N OTHER WORDS HE SUBMITTED THAT SECTION 10A(1) OF THE ACT PRESCRIBES THAT PROF IT AND GAINS AS ARE DERIVED BY AN UNDERTAKING FROM THE EXPORT OF ARTICLES OR TH INGS OR COMPUTER SOFTWARE IS ELIGIBLE FOR DEDUCTION BUT FURTHER SECTION 10A( 4) PROVIDES THAT FOR THE PURPOSE OF SUB-SECTION (1) THE PROFITS DERIVED FRO M EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE SHALL BE THE AMOUNT WHI CH BEARS TO THE PROFITS OF THE BUSINESS OF THE UNDERTAKING THE SAME PROPO RTION AS THE EXPORT TURNOVER IN RESPECT OF SUCH ARTICLES OR THINGS OR C OMPUTER SOFTWARE BEARS TO THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY TH E UNDERTAKING. THEREFORE ITA NO. 4725/DEL/2009 9 HE CONTENDED THAT THE ABOVE PROVISIONS CLEARLY SHOW S THAT SEPARATE FORMULA HAS BEEN GIVEN FOR ALLOWING DEDUCTION U/S. 10A(4) U SING THE EXPRESSION PROFITS OF THE BUSINESS UNDERTAKING AND THEREFO RE IT WOULD NOT BE CORRECT TO THE TEST EACH AND EVERY ITEM OF INCOME ON THE AN VIL OF PHRASE DERIVED FROM UNDERTAKING IN ORDER TO DETERMINE THE AMOUNT OF PROFIT ELIGIBLE FOR DEDUCTION U/S. 10A OF THE ACT. HE THEREFORE CONT ENDED THAT THE INTEREST EARNED ON FIXED DEPOSIT BY THE ASSESSEE IS INCLUDAB LE IN PROFIT OF THE UNDERTAKING FOR THE PURPOSE OF COMPUTING DEDUCTION AVAILABLE TO THE ASSESSEE U/S. 10A OF THE ACT. 12. THE LD. DR ON THE OTHER HAND SUPPORTED THE OR DERS OF THE AUTHORITIES BELOW AND CONTENDED THAT IN THE LIGHT OF THE DECISI ON OF HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS. CIT (2009) 3 17 ITR 218 (SC) AND THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. SHREE RAM HONDA POWER EQUIPMENTS (2007) 289 ITR 479 (DEL. ) AND SOME OTHER DECISIONS RELIED UPON BY THE AO AS WELL AS BY THE L D. CIT(A) BOTH THE AUTHORITIES BELOW WERE JUSTIFIED IN REJECTING THE A SSESSEES CLAIM OF DEDUCTION U/S. 10A IN RESPECT OF THE INTEREST INCOM E EARN ON FIXED DEPOSITS MADE WITH THE BANK OUT OF SURPLUS FUND AVAILABLE WI TH THE ASSESSEE. HE FURTHER CONTENDED THAT MERE BECAUSE SEPARATE FORMUL A HAS BEEN GIVEN IN SECTION 10A(4) WHERE THE PROPORTIONATE PROFIT FROM BUSINESS OF INDUSTRIAL UNDERTAKING IS TO BE WORKED OUT WITH REFERENCE TO T HE PROPORTION AS THE ITA NO. 4725/DEL/2009 10 EXPORT TURNOVER BEARS TO THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE UNDERTAKING IT DOES NOT MEAN THAT EACH AND EVERY P ROFIT OF THE ASSESSEE SHALL BE RECKONED FOR THE PURPOSE OF COMPUTING DEDUCTION U/S. 10A OF THE ACT. HE SUBMITTED THAT ONLY PROFIT OF THE BUSINESS OF THE U NDERTAKING IS RELEVANT FOR THE PURPOSE OF DETERMINING THE AMOUNT OF PROFITS DE RIVED FROM EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE AS PROVIDED IN SECTION 10A(1) READ WITH 10A(4) OF THE ACT. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOT H THE PARTIES CAREFULLY. WE HAVE DELIBERATED UPON THE PROVISIONS OF LAW CONTAINED IN THAT BEHALF AS WELL THE VARIOUS DECISIONS CITED AT THE B AR. 14. THE MOOT QUESTION THAT ARISES FOR OUR CONSIDERA TION IN THE PRESENT CASE IS WHETHER ON THE FACTS OF THE PRESENT CASE THE I NTEREST EARNED BY THE ASSESSEE ON FIXED DEPOSIT IS ASSESSABLE AS PROFIT O F THE BUSINESS OF UNDERTAKING FOR THE PURPOSE OF COMPUTING THE DEDUCT ION AVAILABLE TO THE UNDERTAKING UNDER SECTION 10A OF THE ACT. 15. WE SHALL FIRST ADDRESS OURSELVES TO DECIDE WHET HER THE INTEREST ON FIX DEPOSIT IN THE PRESENT CASE IS EVEN ASSESSABLE UN DER THE HEAD PROFITS AND GAINS OF BUSINESS AND PROFESSION MUCH LESS THE PRO FIT OF THE BUSINESS OF UNDERTAKING. IN ORDER TO DECIDE THIS ASPECT OF THE MATTER WE HAVE TO DWELL UPON THE NATURE AND SOURCE OF FIXED DEPOSITS MADE B Y THE ASSESSEE. IN THIS CONNECTION THE LD. COUNSEL FOR THE ASSESSEE HAS IN VITED OUR ATTENTION TO THE ITA NO. 4725/DEL/2009 11 CHART OF SEQUENCE OF EVENTS DEPICTING THE SOURCE OF THE FUND FOR MAKING FDRS WITH THE BANK. FROM THE DETAILS FILED BY THE ASSESSEE AND FROM THE AUDITED ACCOUNTS IT IS SEEN THAT THE ASSESSEE IS A PROPRIETOR OF TWO CONCERNS VIZ. M/S. MEENAKSHI INTERNATIONAL AND M/S. SURBHI ENTERPRISES. THE PROFIT FROM M/S. MEENAKSHI INTERNATIONAL HAS BEEN CLAIMED TO BE ELIGIBLE FOR DEDUCTION U/S. 10A OF THE ACT. THE ASSESSEES ANOT HER CONCERN VIZ. M/S. SURBHI ENTERPRISES BUSINESS IS NOT COVERED BY THE EXEMPTION PROVISIONS OF SECTION 10A OF THE ACT. IN THE RETURN OF INCOME FI LED BY THE ASSESSEE THE NET PROFIT DETERMINED AS PER THE AUDITED PROFIT & LOSS ACCOUNT AND BALANCE SHEET OF M/S. MEENAKSHI INTERNATIONAL AMOUNTING TO RS. 1 01 58 220/- HAS BEEN CLAIMED TO BE EXEMPTED U/S. 10A OF THE ACT. THE AS SESSEES TOTAL TURNOVER IS FROM EXPORT OF GOLD JEWELLERY. THE NET PROFIT IN R ESPECT OF ANOTHER CONCERN M/S. SURBHI ENTERPRISES IS SHOWN AT A NEGATIVE OF R S. 34 050/-. IN THE PROFIT AND LOSS ACCOUNT AT M/S. MEENAKSHI INTERNATIONAL T HE ASSESSEE HAS SHOWN OTHER INCOME IN THE NATURE OF BANK INTEREST OF RS. 44 36 745/- AND EXCHANGE RATE FLUCTUATION OF RS. 25 54 874/-. IN THIS APPEA L WE ARE CONCERNED WITH THE BANK INTEREST OF RS. 44 36 745/- WHETHER IT IS TO B E INCLUDED IN THE PROFIT OF THE UNDERTAKING FOR THE PURPOSE OF COMPUTING DEDUCT ION U/S. 10A OF THE ACT. THE INTEREST INCOME HAS BEEN EARNED ON THE FIXED DE POSITS AMOUNTING TO RS. 1 91 00 000/- DEPOSITED ON 20.09.2002 AND 21.09.200 2 WITH MATURITY DATES ITA NO. 4725/DEL/2009 12 DUE ON 19.09.2006 AND 20.09.2006. THESE DEPOSITS M ADE ON 20.09.2002 AND 21.09.2002 WITH VYAS BANK ARE AS UNDER:- DATE AMOUNT MATURITY DATE 20.09.2002 82 00 000/- 19.09.2006 20.09.2002 21 50 000/- 19.09.2006 21.09.2002 87 50 000/- 20.09.2006 TOTAL 1 91 00 000 /- 16. THREE NOS. OF FIXED DEPOSITS AGGREGATING TO RS. 1 91 00 000/- WERE INITIALLY MADE WITH THE ABN AMRO BANK ON 07.09.2002 09.09.2002 AND 11.09.2002 WITH MATURITY DATE FALLS ON 20.09.2002 A ND 21.09.2002 AND HAVING MATURITY AMOUNT OF RS. 1 91 29 299/-. 17. THE AFORESAID FIXED DEPOSITS WITH ABN AMRO BANK WERE MATURED ON RESPECTIVE MATURITY DATES FALLS ON 20.09.1992 AND 2 1.09.1992 WHEN THE MATURITY AMOUNT WAS WITHDRAWN. IMMEDIATELY THEREAF TER THE AMOUNT OF RS. 82 00 000/- RS 21 50 000/- AND RS. 87 50 000/- WER E TRANSFERRED FROM ABN AMRO BANK TO VYAS BANK FOR MAKING FDRS ON 20.09.199 2 AND 21.09.1992. THE ORIGINAL FIXED DEPOSITS MADE WITH ABN AMRO BANK ON 07.09.1992 09.09.1992 AND 11.09.1992 WERE MADE OUT OF THE FUND S TRANSFERRED FROM BANK ACCOUNT STANDING IN THE NAME OF ASSESSEES ANO THER CONCERN VIZ. M/S. SURBHI ENTERPRISES TO THE ASSESSEES PROPRIETORY CO NCERN VIZ. M/S. MEENAKSHI INTERNATIONAL WHICH MAKES IT CLEAR THAT THE FUND AVAILABLE IN THE ASSESSEES CONCERN M/S. SURBHI ENTERPRISES WAS TRAN SFERRED TO THE ASSESSEES ITA NO. 4725/DEL/2009 13 OTHER CONCERN M/S. MEENAKSHI INTERNATIONAL. THE AS SESSEE HAS FILED THE COPY OF BANK ACCOUNT WITH ABN AMRO BANK IN THE NAME OF M /S. SURBHI ENTERPRISES FOR THE YEAR 2002-03 AND ON PERUSAL TH EREOF WE FIND THAT THE MONEY HAS BEEN TRANSFERRED FROM THE BANK ACCOUNT OF M/S. SURBHI ENTERPRISES TO THE ACCOUNT OF M/S. MEENAKSHI INTERN ATIONAL. IT IS NOT THE ASSESSEES CASE THAT PROFIT FROM M/S. SURBHI ENTERP RISES IS ALSO ELIGIBLE FOR EXEMPTION U/S. 10A OF THE ACT. THE ASSESSEE HAS TR IED TO MAKE OUT A CASE THAT THE FIXED DEPOSIT WERE MADE OUT OF THE BUSINES S FUND AND NOT OUT OF SURPLUS FUND AND THEREFORE THE INTEREST EARNED O N FIXED DEPOSITS IS ASSESSABLE UNDER THE HEAD BUSINESS. BUT AFTER C ONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ELUCIDA TING THE POSITION OF LAW WE FIND OURSELVES NOT TO BE IN AGREEMENT WITH THE A SSESSEES CONTENTION THAT THE INTEREST EARNED ON FIXED DEPOSIT IS ASSESSABLE UNDER THE HEAD BUSINESS. IN THE PRESENT CASE AS ALREADY POINTED OUT ABOVE THE FIXED DEPOSITS WERE MADE IN THE NAME OF THE ASSESSEES PROPRIETORY CONC ERN M/S. MEENAKSHI INTERNATIONAL OUT OF THE FUNDS TRANSFERRED FROM ASS ESSEES ANOTHER CONCERN M/S. SURBHI ENTERPRISES. THE FUNDS AVAILABLE WITH THE ASSESSEE IN ITS PROPRIETORY CONCERN M/S. SURBHI ENTERPRISES HAS BEE N TRANSFERRED TO THE ACCOUNT OF M/S. MEENAKSHI INTERNATIONAL FOR THE PUR POSE OF CREATING FIXED DEPOSITS IN THE NAME OF M/S. MEENAKSHI INTERNATIONA L. THE TRANSACTION OF TRANSFERRING FUND FROM ASSESSEES ONE PROPRIETORY C ONCERN TO ANOTHER IS NOT ITA NO. 4725/DEL/2009 14 AT ALL CONNECTED TO THE VERY BUSINESS OF THE ELIGIB LE UNDERTAKING CARRIED OUT BY THE ASSESSEE. MERE BECAUSE THE ASSESSEE HAS BEE N ABLE TO ACCUMULATE FUND OUT OF PROFIT FROM BUSINESS AND THE AMOUNT SO ACCUMULATED WITH THE ASSESSEE FROM PROFIT OF ANY BUSINESS IS INVESTED IN MAKING FIXED DEPOSITS HAVING NO LINK OR CONNECTION TO THE BUSINESS ACTIVI TY IT IS VERY DIFFICULT TO ACCEPT THE VIEW THAT THE FIXED DEPOSIT HAS BEEN MA DE OUT OF THE SO-CALLED BUSINESS FUND SO AS TO TREAT ANY INCOME BY WAY OF I NTEREST FROM THAT FIXED DEPOSIT AS INCOME FROM BUSINESS. IF ANY ASSESSEE WHO IS ENGAGED IN THE BUSINESS OF EXPORTING GOODS OR THINGS OR ARTICLES A ND INVESTS THE SURPLUS FUND GENERATED FROM HIS BUSINESS PROFIT IN ANY FIXED DE POSIT OR IN ANY OTHER ASSETS HAVING NO LINK OR NEXUS BETWEEN THE INVESTMENT SO M ADE AND BUSINESS ACTIVITY OF THE ASSESSEE IT WILL BE AN IRRATIONAL AND ILLOGICAL CONCLUSION TO HOLD THAT THE INTEREST EARNED ON FIXED DEPOSITS OR ANY INCOME EARNED FROM THE ASSETS SO ACQUIRED WOULD BE BUSINESS INCOME. FOR I NSTANCE IF ANY BUSINESS IS CARRIED ON BY ANY ASSESSEE AND HE EARNS PROFIT THERE FROM AND THE FUND ACCUMULATED OUT OF THAT PROFIT OF THE BUSINESS IS N OT RE-EMPLOYED FOR THE PURPOSE OF BUSINESS BUT IS INVESTED IN ANY FIXED D EPOSIT OR IN ANY HOUSE PROPERTY OR IN SHARES THE INTEREST INCOME EARNED O N SUCH FIXED DEPOSITS OR ANY RENTAL INCOME DERIVED FROM THE HOUSE PROPERTY S O ACQUIRED OR ANY GAIN EARNED ON SALE OF SHARES WOULD NOT BY ANY STANDARD OR BY ANY STRETCH OF IMAGINATION BE CATEGORIZED AS BUSINESS INCOME UNLES S IT IS PROVED AND ITA NO. 4725/DEL/2009 15 ESTABLISHED THAT THE FIXED DEPOSITS SO MADE OR THE HOUSE PROPERTY SO ACQUIRED OR THE SHARES SO PURCHASED WERE MADE OR ACQUIRED OR PURCHASED IN THE COURSE OF ANY BUSINESS ACTIVITY CARRIED ON BY T HE ASSESSEE FURTHER MERELY BECAUSE THE F.D. SO MADE OR THE PROPERTY SO ACQUIRED OR THE SHARES SO PURCHASED ARE SUBSEQUENTLY PLACED AS SECURITY AG AINST ANY LOAN OR BORROWINGS OBTAINED FOR THE PURPOSE OF BUSINESS TH AT WOULD NOT ALTER THE VERY ORIGINAL NATURE OF INVESTMENT EARLIER MADE OUT OF FUND AVAILABLE WITH THE ASSESSEE DE-HORS ANY BUSINESS ACTIVITY. 18. IN ORDER TO COVER ANY INTEREST INCOME EARNED ON DEPOSITS UNDER THE AMBIT OF BUSINESS INCOME THE NECESSARY PRE-REQUI SITE CONDITION IS NOT THE DEPLOYMENT OF BUSINESS FUNDS BUT THE NATURE OF DEPO SITS AND THE PURPOSE FOR WHICH THE DEPOSITS IS MADE WHICH RESULTS IN SUCH I NTEREST INCOME. IF THE FUNDS OF THE BUSINESS ARE PARKED FOR SAFE KEEPING O R WITH A VIEW TO EARN INTEREST INCOME DE-HORS THE BUSINESS ACTIVITY THE INTEREST RESULTING THERE FROM CANNOT ASSUME THE CHARACTER OF BUSINESS INCOME BUT IT WOULD FALL UNDER THE HEAD INCOME FROM OTHER SOURCES. IN THE PRESENT C ASE THE FIXED DEPOSITS WERE INITIALLY MADE ON 07.09.2002 TO 11.09.2002 WIT H ABN AMRO BANK OUT OF THE FUNDS TRANSFERRED FROM THE ASSESSEES ONE PR OPRIETORY CONCERN M/S. SURBHI ENTERPRISES TO ASSESSEES ANOTHER PROPRIETOR Y CONCERN M/S. MEENAKSHI INTERNATIONAL AND ON MATURITY OF THOSE FIX DEPOSIT S ON 20.09.2002 AND 21.09.2002 THE AMOUNT WERE TRANSFERRED FROM ABN AM RO BANK TO VYAS ITA NO. 4725/DEL/2009 16 BANK AND FRESH DEPOSITS OUT OF THE SAME MATURITY P ROCEEDS WERE MADE ON 20.09.2002 AND 21.09.2002 WITH VYAS BANK WITH MATUR ITY DATE FALLING DUE ON 19.09.2006 AND 20.09.2006. NOTHING HAS BEEN SHO WN OR POINTED OUT BY THE ASSESSEE THAT THE FIXED DEPOSITS INITIALLY MADE WITH ABN AMRO BANK WERE MADE IN THE COURSE OF CARRYING OUT ANY BUSINES S ACTIVITY. NOTHING HAS ALSO BEEN SHOWN THAT WHEN THESE FIXED DEPOSITS WERE TRANSFERRED FROM ABN AMRO BANK TO VYAS BANK THE SAME WERE MADE IN THE C OURSE OF BUSINESS ACTIVITY OF ELIGIBLE UNDERTAKING. THE ASSESSEE SUB SEQUENTLY OBTAINED OVERDRAFT FACILITY ON 23.11.2002 AND AT THE TIME O F AVAILING OVERDRAFT FACILITY THE ASSESSEE HAD CHOSEN TO PLACE THE FIXE D DEPOSITS WHICH WERE ALREADY CREATED OUT OF THE FUNDS TRANSFERRED FROM M /S. SURBHI ENTERPRISES TO M/S. MEENAKSHI INTERNATIONAL AS SECURITY AGAINST T HE OVERDRAFT FACILITY. FROM THE CERTIFICATE DATED 23.11.2002 GIVEN BY THE VYSYA BANK LTD. IT IS SEEN THAT THE BANK SANCTIONED OVERDRAFT CREDIT FACI LITIES OF RS. 1 70 00 000/- AND ACCEPTED THE FIXED/TERM DEPOSITS OF RS. 1 91 00 000/- AS SECURITY IN PURSUANCE TO ASSESSEES LOAN APPLICATION DATED 23.1 1.2002. THE ASSESSEE HAS AVAILED OVERDRAFT FACILITIES AGAINST SECURITY OF FI XED DEPOSITS/TERM DEPOSITS OF RS. 1 91 00 000/- WHICH WERE ALREADY CRATED OR MAD E PRIOR TO AVAILING OVERDRAFT FACILITIES. THUS THE AMOUNT WHICH WAS D EPOSITED BY WAY OF FIXED DEPOSITS HAS NO RELATION OR NEXUS WITH THE LOAN FAC ILITIES AVAILED BY THE ASSESSEE EXCEPT THAT THE FIXED DEPOSITS WERE MERELY CHOSEN TO BE PLACED AS ITA NO. 4725/DEL/2009 17 SECURITY AGAINST LOANS. IT IS THUS NOT A CASE WH ERE THE FIXED DEPOSITS WERE REQUIRED TO BE MADE BY THE ASSESSEE FOR THE PURPOSE OF EFFECTING ANY BUSINESS ACTIVITY OF THE ELIGIBLE UNIT. IT IS THE CASE OF S IMPLE PARKING OF SURPLUS FUNDS WITHDRAWN FROM THE ASSESSEES ONE PROPRIETORY CONCE RN AND TRANSFERRED TO THE ASSESSEES ANOTHER PROPRIETORY CONCERN. THE FI XED DEPOSITS SO MADE BY THE ASSESSEE INITIALLY WITH ABN AMRO BANK AND THEN TRANSFERRED TO VYAS BANK HAVE NO RELATION OR NEXUS WITH THE ASSESSEES BUSINESS OF UNDERTAKING FROM THE EXPORT OF GOLD JEWELLERY THE PROFIT OF WH ICH IS CLAIMED AS DEDUCTION UNDER SECTION 10A OF THE ACT. EVEN IN A BROAD SENSE OF THE MATTER THE FIXED DEPOSITS SO MADE CANNOT BE SAID TO HAVE A NY RELATION OR NEXUS WITH ANY BUSINESS ACTIVITY OF THE ASSESSEE. THEREFORE THE INTEREST INCOME EARNED ON SUCH FIXED DEPOSITS HAS BEEN RIGHTLY TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES BY THE AUTHORITIES BELOW. 19. IN THE LIGHT OF OUR FINDING THAT THE ASSESSEE H AS MADE FIXED DEPOSIT OUT OF THE SURPLUS FUND IRRESPECTIVE OF THE FACT THAT W HETHER THE SURPLUS FUND IS ACCUMULATED FROM BUSINESS INCOME OR ANY OTHER INCOM E THE DECISION OF HONBLE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF CIT VS. SHREE RAM HONDA POWER EQUIPMENTS & ORS. (SUPRA) IS SQUARELY A PPLICABLE TO THE PRESENT CASE. IN THAT CASE THE HONBLE DELHI HIGH COURT HAS ANALYZED AND CONSIDERED THE QUESTION FROM THE STANDPOINT OF VIEW WHETHER IN ANY GIVEN CASE INTEREST INCOME ON DEPOSIT IS TO BE REGARDED AS BUSINESS INCOME OR ITA NO. 4725/DEL/2009 18 INCOME FROM OTHER SOURCES AND AFTER ANALYZING VARI OUS DECISIONS THE HONBLE DELHI HIGH COURT HAS HELD THAT THE INTEREST INCOME EARNED ON FIXED DEPOSITS CREATED OUT OF SURPLUS FUND AND BEARING NO NEXUS WITH THE BUSINESS ACTIVITY OF THE ASSESSEE SHALL NOT BE CONSIDERED A S BUSINESS INCOME BUT IS INCOME FROM OTHER SOURCES. EVEN IF ONE WERE TO DRA W AN ANALOGY IN THE CASES NOT COVERED BY THE PROVISIONS OF SECTION 80HH C READ WITH CLAUSE (BAA) TO THE EXPLANATION BELOW SUB-SECTION (4C) OF SECTIO N 80HHC THE INTEREST INCOME EARNED ON THE FIXED DEPOSITS CREATED OUT OF SURPLUS FUND AND BEARING NO NEXUS WITH THE BUSINESS ACTIVITY OF THE ASSESSEE CANNOT BE TREATED AS BUSINESS INCOME AS SO HELD BY THE HONBLE JURISDICT IONAL HIGH COURT IN THE CASE OF CIT VS. SHREE RAM HONDA POWER EQUIPMENTS & ORS. (SUPRA). THEREFORE THE CONTENTION OF THE LD. COUNSEL FOR TH E ASSESSEE THAT THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SHREE RAM HONDA POWER EQUIPMENTS & ORS. (SUPRA) IS NOT APPLICABLE TO THE CONTROVERSY INVOLVED IN THE PRESENT CASE IS REJECTED. 20. THE AFORESAID DECISION IN THE CASE OF CIT VS. S HRI RAM HONDA POWER EQUIPMENTS & ORS. (SUPRA) HAS BEEN FOLLOWED BY THE HONBLE DELHI HIGH COURT IN ITS LATER DECISION IN THE CASE OF CIT VS. DELHI BRASS AND METAL WORKS LTD. (2009) 313 ITR 352 (DEL.) WHERE THE HON BLE HIGH COURT HAS OBSERVED THAT IT HAS CONSIDERED ITS DECISION IN THE CASE OF CIT VS. SHRI RAM HONDA POWER EQUIPMENTS & ORS. (SUPRA) IN THE CONTE XT OF BOTH THE ITA NO. 4725/DEL/2009 19 SITUATIONS I.E. WHERE THE ASSESSEE EARNS INTERES T ON ACCOUNT OF PARKED SURPLUS FUNDS AS ALSO WHERE ANY EXPORTER IS MANDAT ORILY REQUIRED TO KEEP MONEY IN FIXED DEPOSIT IN ORDER TO AVAIL OF CREDIT FACILITIES FOR EXPORT OF BUSINESS AND THEN OBSERVED THAT IN THE BOTH THE SI TUATIONS THIS COURT HAS HELD THAT INTEREST EARNED DOES NOT HAVE ANY IMMEDIA TE NEXUS WITH THE EXPORT BUSINESS AND HENCE WILL HAVE TO BE TREATED AS INC OME FROM OTHER SOURCES. IN THAT CASE ALSO THE ASSESSEE WAS 100% EXPORTER O F READYMADE GARMENTS AND HAD SURPLUS FUNDS WHICH WERE PUT IN FIXED DEPOS IT WITH THE BANK. THEREAFTER THE ASSESSEE AVAILED OVERDRAFT FACILITY FROM THE BANK AND PREVAILS UPON THE BANK TO FURNISH A BANK GUARANTEE WHICH WA S SECURED BY THE FIXED DEPOSIT HELD WITH THE BANK. IN THIS CONTEXT THE H ONBLE HIGH COURT HELD THAT THE INTEREST EARNED ON FIXED DEPOSIT DID NOT HAVE A NY IMMEDIATE NEXUS WITH THE EXPORT BUSINESS AND HENCE WOULD HAVE TO BE TR EATED AS INCOME FROM OTHER SOURCES. THE HONBLE HIGH COURT FURTHER HEL D THAT THE ASSESSEE COULD NOT BE ALLOWED TO ADJUST BY WAY OF EXPENDITURE INTE REST PAID TO THE BANK ON OVERDRAFT FACILITY AGAINST THE INTEREST RECEIVED BY IT ON FIXED DEPOSIT KEPT WITH THE BANK AS THIS WAS NOT EXPENDITURE LAID DOWN WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF EARNING INTEREST ON FIXED DEPOSI T. THE PRINCIPLE LAID DOWN IN THE CASE IN THE LIGHT OF THE FACTS OF THAT CASE IS UNDOUBTEDLY SQUARELY APPLICABLE TO THE PRESENT CASE BEFORE US IN AS MUCH AS IN THE PRESENT CASE ALSO THE SURPLUS FUNDS AVAILABLE WITH THE ASSESSEE WERE PUT IN A FIXED DEPOSIT ITA NO. 4725/DEL/2009 20 WITH THE BANK AND THEREAFTER FOR AVAILING OVERDRAF T FACILITY THE FIXED DEPOSIT HELD WITH THE BANK WERE PLEDGED AS SECURITY AND THE RE WAS NO NEXUS WITH THE BUSINESS OF EXPORT OF GOLD ORNAMENTS CARRIED OUT BY THE ASSESSEES UNDERTAKING IN RESPECT OF WHICH THE ASSESSEE IS CLA IMING DEDUCTION U/S. 10A OF THE ACT. 21. IT IS ALSO PERTINENT TO NOTE THAT THE HONBLE D ELHI HIGH COURT IN THE CASE OF CIT VS. SHRI RAM HONDA POWER EQUIPMENTS & O RS. (SUPRA) HAS CONSIDERED AMONGST OTHERS THE DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF URBAN STANLAUS CO. VS. CIT (2003) 263 I TR 10 (KER.) K. RAVINDRANATHAN NAIR VS. DCIT (2003) 262 ITR 669 (KE R.) AND SOUTHERN CASHEW EXPORTERS VS. DEPUTY CIT (2003) 130 TAXMAN 203 (KER.) WHERE IT WAS CONSISTENTLY HELD BY THE HONBLE KERALA HIGH CO URT THAT INTEREST INCOME EARNED ON FIXED DEPOSITS HAVING TO BE KEPT FOR AVAI LING OF CREDIT FACILITIES FROM THE BANK DOES NOT QUALIFY AS BUSINESS INCOME. THE HONBLE DELHI HIGH COURT FURTHER NOTED THAT THE AFORESAID THREE D ECISIONS HAS BEEN AFFIRMED BY THE HONBLE SUPREME COURT BY THE DISMISSAL OF TH E SPECIAL LEAVE PETITION ORDER BEING REPORTED IN (2003) 265 ITR (S T.) 38 (2003) 263 ITR (ST.) 3 AND (2003) 264 ITR (ST.) 142 RESPECTIVELY. WHILE TAKING A VIEW THAT IN BOTH THE SITUATIONS THE INTEREST EARNED ON FIXE D DEPOSITS DOES NOT HAVE ANY IMMEDIATE NEXUS WITH THE EXPORT BUSINESS AND HENCE WILL HAVE TO BE TREATED AS INCOME FROM OTHER SOURCES THE HONBLE DELHI HIG H COURT HAS OBSERVED ITA NO. 4725/DEL/2009 21 THAT IN THE LIGHT OF THE REPEATED AFFIRMATION BY TH E HONBLE SUPREME COURT OF THREE JUDGMENTS OF THE HONBLE KERALA HIGH COURT ON THE SAME ISSUE THEY ARE INCLINED TO FOLLOW THE VIEW EXPRESSED BY THE KE RALA HIGH COURT ON EACH OF THESE OCCASIONS. IT WAS FURTHER OBSERVED BY THE DELHI HIGH COURT THAT THE KERALA HIGH COURT HAS CONSISTENTLY FOLLOWED THE EAR LIER JUDGMENTS LISTED AT (I) TO (IV) OF PARAGRAPH 14 OF THEIR DECISION. HAVI NG OBSERVED SO THE HONBLE DELHI HIGH COURT HELD THAT INTEREST EARNED ON FIXED DEPOSIT FOR THE PURPOSE OF AVAILING OF CREDIT FACILITIES FROM THE BANK DOES NOT HAVE IMMEDIATE NEXUS WITH THE EXPORT BUSINESS AND THEREFORE HAS TO NE CESSARILY BE TREATED AS INCOME FROM OTHER SOURCES AND NOT BUSINESS INCOME. 22. FURTHER IN THE CASE OF ABAD ENTERPRISES VS. CI T (2002) 253 ITR 319 THE HONBLE KERALA HIGH COURT HAS TAKEN A VIEW THAT INTEREST RECEIVED ON BANK DEPOSITS IS NOT ENTITLED TO DEDUCTION U/S. 80H HC OF THE ACT. IN THIS CASE THE HONBLE KERALA HIGH COURT REFERRED TO ITS OWN DECISION IN THE CASE OF CIT VS. COCHIN REFINERIES LTD. (1982) 135 ITR 27 8 (KER.) WHERE IT WAS HELD THAT INTEREST RECEIVED ON DEPOSITS BY THE ASSE SSEE WAS NOT INCOME DERIVED FROM THE BUSINESS EVEN IF THE DEPOSIT IS MADE OUT OF THE INCOME DERIVED FROM THE BUSINESS. SIMILARLY AS HELD BY H ONBLE HIGH COURT OF MADRAS IN B. SESHAMMA VS. CIT (1979) 119 ITR 314 (M AD.) INTEREST EARNED FROM ANY SOURCE IS GENERALLY INCOME FROM OTHER SOUR CES. AGAIN THE HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS. JOSE THOMA S (2002) 253 ITR 553 ITA NO. 4725/DEL/2009 22 (KER.) HAS HELD THAT INTEREST INCOME ON BANK DEPOSI TS IS INCOME FROM OTHER SOURCES AND IT DOES NOT CONSTITUTES BUSINESS INCOME FOR THE COMPUTATION OF RELIEF U/S. 80HHC OF THE ACT. IN THIS CASE IT WAS FURTHER HELD THAT THE INCOME GENERATED FROM COLLATERAL SECURITIES DOES NOT CONST ITUTES THE BUSINESS INCOME UNLESS THE ASSESSEE IS ENGAGED IN THE ACTIVITY OF ADVANCING MONEY AND RECEIVING INCOME IN THE FORM OF AN INTEREST. IN TH IS CASE THE HONBLE HIGH COURT WAS UNABLE TO ACCEPT THE LOGIC OF THE TRIBUNA L. THEIR LORDSHIPS FURTHER OBSERVED IF THE ASSESSEE HAD OFFERED AGRIC ULTURAL LAND AS COLLATERAL SECURITY FOR BUSINESS LOAN THE TRIBUNAL PROBABLY W OULD HAVE HELD THAT AGRICULTURAL INCOME ARISING FROM SUCH LAND WOULD AL SO CONSTITUTE BUSINESS INCOME FOR THE PURPOSE OF THE COMPUTATION OF ELIGI BLE PROFIT U/S. 80HHC OF THE ACT. THEREFORE THE HONBLE HIGH COURT HAD TAK EN A VIEW THAT THE TRIBUNAL WENT WRONG IN REVERSING THE EXCLUSION OF I NCOME IN THE FORM OF DIVIDEND FROM SBI MAGNUM AND INTEREST INCOME FROM B ANK DEPOSITS FROM BUSINESS INCOME MADE BY THE AO. AGAIN THE HONBLE KERALA HIGH COURT REITERATED ITS SAID VIEW IN THE CASE OF ACIT VS. SO UTH INDIA PRODUCE CO. (2003) 262 ITR 20 THAT INTEREST INCOME ON BANK DEPO SITS IS ONLY INCOME FROM OTHER SOURCES AND IT DOES NOT CONSTITUTE BUS INESS INCOME FOR THE PURPOSE OF COMPUTATION OF RELIEF U/S. 80HHC OF THE ACT. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE KERALA HIGH COURT IN THE CASE OF K. RAVINDRANATHAN NAIR VS. DCIT (2003) 262 ITR 669 HOL DING THAT THE INTEREST ITA NO. 4725/DEL/2009 23 FROM SHORT TERM DEPOSITS RECEIVED BY THE ASSESSEE W AS NOT DIRECT RESULT OF ANY EXPORT OF ANY GOODS OR MERCHANDISE. AN IDENTICAL V IEW HAS ALSO BEEN TAKEN BY THE HONBLE KERALA HIGH COURT IN THE FOLLOWING C ASES:- I. CIT VS. ABAD FICIARIES (2002) 258 ITR 641 (KER.) II. URBAN STANLAUS CO. VS. CIT (2003) 263 ITR 11. III. GTN TEXTILES LTD. VS. DCIT (2005) 279 ITR 72. 23. FOR THE REASONS GIVEN ABOVE AND IN THE LIGHT OF THE FACTS OF THE PRESENT CASE WE HAVE NO HESITATION IN HOLDING THAT THE INT EREST EARNED ON FIXED DEPOSITS MADE WITH THE BANK IS ASSESSABLE UNDER THE HEAD OTHER SOURCES. 24. EVEN OTHERWISE ASSUMING THAT INTEREST EARNED BY THE ASSESSEE ON FIXED DEPOSIT IS ASSESSABLE UNDER THE HEAD BUSINESS TH E SAME BY NO STRETCH OF IMAGINATION OR BY ANY STANDARD CAN BE CONSTRUED TO BE THE PROFIT OF THE BUSINESS OF THE ASSESSEES UNDERTAKING ELIGIBLE FOR DEDUCTION U/S. 10A OF THE ACT IN AS MUCH AS WHEN THIS SURPLUS FUND WERE PARKE D IN FIXED DEPOSIT IT HAD NO LINK OR NEXUS WITH ANY BUSINESS ACTIVITY OF THE UNDERTAKING OF THE ASSESSEE COVERED BY SECTION 10A OF THE ACT. IT IS WELL SETT LED THAT MERELY BECAUSE ANY INCOME IS ASSESSED AS BUSINESS INCOME WILL NOT AUTO MATICALLY CONFER THE BENEFITS OF A PARTICULAR DEDUCTION ONCE THERE IS A RIDER PROVISION THAT SUCH INCOME SHOULD BE A PROFIT OF THE PARTICULAR BUSINES S OF UNDERTAKING OR THE PROFIT SHOULD BE DERIVED FROM A PARTICULAR BUSINESS OF UNDERTAKING. IN THE INSTANT CASE INTEREST INCOME IS RECEIVED FROM FDRS MADE OUT OF SURPLUS FUND ITA NO. 4725/DEL/2009 24 WITHOUT HAVING ANY LINK OR NEXUS TO THE BUSINESS OF UNDERTAKING AND THEREFORE THE SAME CANNOT BE HELD TO BE A PROFIT O F THE BUSINESS OF UNDERTAKING MUCH LESS THE PROFIT AS DERIVED FROM BU SINESS OF UNDERTAKING. IN THIS RESPECT A REFERENCE IS MADE TO A DECISION OF HONBLE SUPREME COURT IN THE CASE OF PANDIAN CHEMICALS LTD. VS. CIT (2003 ) 262 ITR 278 (SC) WHERE IT WAS HELD THAT THE INTEREST DERIVED BY THE INDUSTRIAL UNDERTAKING OF THE ASSESSEE ON DEPOSITS MADE WITH THE ELECTRICITY BOARD FOR THE SUPPLY OF ELECTRICITY FOR RUNNING THE INDUSTRIAL UNDERTAKING CANNOT BE SAID TO FLOW DIRECTLY FROM THE INDUSTRIAL UNDERTAKING ITSELF AND WAS NOT PROFIT OR GAINS DERIVED BY THE UNDERTAKING FOR THE PURPOSE OF THE S PECIAL DEDUCTION U/S. 80HH OF THE ACT. AN IDENTICAL VIEW HAS BEEN TAKEN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. AUTOKASTE LTD. (2001) 248 ITR 110 (SC). LIKEWISE IN CIT VS. DR. V.P. GOPINATHAN (2001) 284 ITR 449 (SC) INTEREST ON FIXED DEPOSIT WAS HELD NOT TO QUALIFY FOR SETTIN G OFF AGAINST THE INTEREST ON LOANS BORROWED. 25. AT THIS STAGE WE FIND IT PROPER TO CONSIDER TH E ASSESSEES CONTENTION THAT THE EXPRESSION USED IN SECTION 10A(4) IS PROF ITS OF THE BUSINESS OF THE UNDERTAKING AND NOT THE PROFITS DERIVED FROM THE UNDERTAKING AND THEREFORE THE INTEREST EARNED ON FIXED DEPOSITS MA DE OUT OF THE BUSINESS FUND IS TO BE TREATED AS PROFIT OF THE BUSINESS OF THE U NDERTAKING RENDERING THE SAME ELIGIBLE FOR DEDUCTION U/S. 10A OF THE ACT. S ECTION 10A(1) PROVIDES ITA NO. 4725/DEL/2009 25 THAT SUBJECT TO THE PROVISIONS OF THAT SECTION A D EDUCTION OF SUCH PROFITS AND GAINS AS ARE DERIVED BY AN UNDERTAKING FROM THE EXP ORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE SHALL BE ALLOWED FROM THE TOTA L INCOME OF THE ASSESSEE. SECTION 10A(4) STIPULATES THAT FOR THE PURPOSE OF S UB-SECTION (1) OF SECTION 10A THE PROFITS DERIVED FROM EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE SHALL BE THE AMOUNT WHICH BEARS TO THE PR OFIT OF THE BUSINESS OF THE UNDERTAKING THE SAME PROPORTIONATE AS THE EXPORT T URNOVER IN RESPECT OF SUCH ARTICLES OR THINGS OR COMPUTER SOFTWARE BEARS TO TH E TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE UNDERTAKING. FROM THE C ON-JOINT READING OF SECTION 10A(1) AND 10A(4) IT IS CLEAR THAT WHAT IS DEDUCTIBLE FROM THE TOTAL INCOME OF THE ASSESSEE U/S. 10A IS THE PROFIT AND G AINS AS ARE DERIVED BY AN UNDERTAKING FROM THE EXPORT OF ARTICLES OR THINGS O R COMPUTER SOFTWARE. IN THE FORMULA THE EXPRESSION PROFITS OF THE BUSINES S OF THE UNDERTAKING WOULD MEAN THE PROFIT EARNED FROM THE BUSINESS OF T HE UNDERTAKING REFERRED TO IN SECTION 10A(1) OF THE ACT AND NOT THE PROFIT OF ANY OTHER BUSINESS CARRIED ON BY ANY ASSESSEE. THE DEDUCTION AVAILABL E UNDER SECTION 10A(1) IS UNDERTAKING-BASED AND NOT ASSESSEE-BASED. THEREFOR E TO INCLUDE ANY ITEM OF INCOME WITHIN THE AMBIT OF PROFITS OF THE BUSINESS OF THE UNDERTAKING ONE MUST PROVE AND ESTABLISH THAT THAT ITEM OF INCOME S OUGHT TO BE INCLUDED IN THE PROFITS OF THE BUSINESS OF THE UNDERTAKING FOR THE PURPOSE OF SECTION 10A(1) READ WITH 10A(4) SHOULD BE THE PROFIT DERIVE D FROM THE BUSINESS OF ITA NO. 4725/DEL/2009 26 THE UNDERTAKING. THE INCOME WHICH IS NOT DIRECTLY RELATED OR CONNECTED TO THE BUSINESS OF THE UNDERTAKING CANNOT BE MADE A PA RT OF THE PROFITS FOR THE PURPOSE OF COMPUTING DEDUCTION ALLOWABLE UNDER SECT ION 10A(1) OF THE ACT. THE EXPRESSION SUCH PROFITS AND GAINS AS ARE DERIV ED BY AN UNDERTAKING FROM THE EXPORT OF ARTICLES OR THINGS OR COMPUTER S OFTWARE USED IN SUB- SECTION (1) AND THE EXPRESSION THE PROFITS DERIVED FROM EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE USED IN OPENING PART O F SUB-SECTION (4) AND THE EXPRESSION THE PROFITS OF THE BUSINESS OF THE UNDE RTAKING USED IN FORMULA PROVIDED IN SUB-SECTION (4) GIVES MATERIALLY ONE AN D SAME MEANING SO AS TO ALLOW THE DEDUCTION U/S. 10A(1) OF THE AMOUNT WHICH BEARS TO THE PROFITS OF THE BUSINESS OF THE UNDERTAKING. THE SAME PROPORTI ON AS THE EXPORT TURNOVER OF THE UNDERTAKING BEARS TO THE TOTAL TURNOVER OF T HE BUSINESS CARRIED ON BY THE UNDERTAKING. 26. IN THIS RESPECT WE MENTION THAT IDENTICAL ARGU MENT ABOUT DIFFERENCE IN LANGUAGE USED IN SECTION 80-I VIS--VIS 80-IA OR 80 IB WAS ALSO TAKEN IN THE CASE OF LIBERTY INDIA VS. CIT (2009) 317 ITR 218 (S C) CONTENDING THAT SINCE LANGUAGE USED IN SECTION 80-IA OR 80-IB IS PROFITS DERIVED FROM BUSINESS OF INDUSTRIAL UNDERTAKING AS AGAINST LANGUAGE USED IN SECTION 80-I AS PROFITS DERIVED FROM INDUSTRIAL UNDERTAKING THE SCOPE OF DEDUCTION U/S. 80-IA OR 80-IB IS WIDER THAN THAT OF SECTION 80-I. HOWEVER THE EXPRESSION PROFITS DERIVED FROM BUSINESS OF INDUSTRIAL UNDERTAKING WA S GIVEN SAME MEANING ITA NO. 4725/DEL/2009 27 AND INTERPRETATION AS TO THE EXPRESSION USED AS PR OFITS DERIVED FROM INDUSTRIAL UNDERTAKING BY HONBLE SUPREME COURT IN ABOVE REFERRED CASE. IN THAT CASE EVEN IN THE LIGHT OF LANGUAGE USED AS DERIVED FROM BUSINESS OF INDUSTRIAL UNDERTAKING IN SECTION 80-IA AND 80-IB AS AGAINST LANGUAGE USED AS DERIVED FROM INDUSTRIAL UNDERTAKING USED IN SE CTION 80-I THE HONBLE SUPREME COURT HELD THAT PROFIT FROM DUTE ENTITLEMEN T PASS BOOK SCHEME AND DUTY DRAWBACK SCHEME CANNOT BE SAID TO BE PROFI T DERIVED FROM BUSINESS OF INDUSTRIAL UNDERTAKING AND DEDUCTION IN RESPECT OF THOSE ITEMS WAS DENIED UNDER SECTION 80-I/80-IA/80-IB OF THE AC T. ON SAME ANALOGY THE EXPRESSION SUCH PROFITS AND GAINS AS ARE DERIV ED BY AN UNDERTAKING FROM THE EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWA RE USED IN SECTION 10A(1) WOULD GIVE ITS COLOUR TO THE EXPRESSION PROFITS OF THE BUSINESS OF UNDERTAKING USED IN SECTION 10A(4) OF THE ACT. ME RELY BECAUSE IN THE FORMULA PROVIDED IN SECTION 10A(4) THE EXPRESSION PROFITS OF THE BUSINESS OF THE UNDERTAKING IS USED FOR THE PURPOSE OF DETE RMINING THE PROFITS DERIVED FROM EXPORT OF ARTICLE OR THINGS OR COMPUTER SOFTWA RE THE EXPRESSION DERIVED BY AN UNDERTAKING FROM THE EXPORT OF ARTIC LES OR THINGS OR COMPUTER SOFTWARE USED IN SECTION 10-A(1) AND EXPRESSION P ROFITS DERIVED FROM EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE USED IN OPENING PART OF SECTION 10A(4) OR IN OTHER WORDS THE GENERAL EXP RESSION DERIVED FROM CANNOT BE IGNORED WHILE DETERMINING PROFIT OF THE B USINESS OF THE ITA NO. 4725/DEL/2009 28 UNDERTAKING FOR THE PURPOSE OF ALLOWING DEDUCTION U /S. 10A(1) OF THE ACT BECAUSE THE AFORESAID EXPRESSION INVOLVES ONLY THOS E ITEMS OF PROFITS WHICH ARE DERIVED FROM BUSINESS OF UNDERTAKING. EVEN IF WE GIVE THE LIBERAL INTERPRETATION TO THE EXPRESSION PROFITS OF THE BU SINESS OF THE UNDERTAKING USED IN SUB-SECTION (4) OF SECTION 10A ONE MUST PR OVE AND ESTABLISH THAT THE PROFIT CLAIMED AS DEDUCTION U/S. 10A IS THE PROFIT OF THE BUSINESS OF UNDERTAKING AND NOT OF ANY OTHER BUSINESS. IN THE PRESENT CASE THE BUSINESS OF THE UNDERTAKING COVERED BY SECTION 10A IS THE EX PORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE AND THEREFORE ONLY THE PROF IT FROM EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE OF THE UNDERTAKING C AN ONLY BE QUALIFIED FOR DETERMINING THE PROPORTIONATE AMOUNT OF DEDUCTION O F PROFIT AVAILABLE U/S. 10A(1) OF THE ACT. IN THE INSTANT CASE THE INCOME EARNED BY THE ASSESSEE ON FIXED DEPOSIT HAVE NO CONNECTION OR LINK WHATSOEVER WITH THE BUSINESS OF EXPORT OF GOLD JEWELLERY CARRIED ON BY THE ASSESSEE S UNDERTAKING IN RESPECT OF WHICH THE CLAIM OF DEDUCTION U/S. 10A HAS BEEN M ADE BY THE ASSESSEE. THEREFORE FROM THIS ANGLE ALSO THE INTEREST EARNE D ON FIXED DEPOSIT IN THE PRESENT CASE DOES NOT COME UNDER THE AMBIT OF THE PROFITS OF THE BUSINESS OF EXPORT OF GOLD JEWELLERY CARRIED ON BY THE UNDERTAK ING OF THE ASSESSEE AND IS THUS NOT ELIGIBLE FOR DEDUCTION U/S. 10A(1) OF THE ACT. 27. IN THE LIGHT OF THE BINDING DECISIONS OF HONBL E JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF CIT VS. SHRI RAM HONDA PO WER EQUIPMENTS & ITA NO. 4725/DEL/2009 29 ORS. (SUPRA) WHICH HAS BEEN FOLLOWED IN A LATER DE CISION IN THE CASE OF CIT VS. DELHI BRASS AND METAL WORKS LTD. (SUPRA) AND I N THE LIGHT OF SEVERAL DECISIONS OF KERALA HIGH COURT WHICH HAS BEEN AFFI RMED BY THE HONBLE SUPREME COURT BY WAY OF DISMISSAL OF SPECIAL LEAVE PETITION AS SO NOTED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SHRI RAM HONDA POWER EQUIPMENTS & ORS. (SUPRA) AND IN THE LIGHT OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS. CIT PANDIAN CHEMICALS LTD. VS. CIT (SUPRA) AND OTHER DECISIONS REFERRED TO AB OVE THE VARIOUS DECISIONS OF THE TRIBUNAL OR OTHER HIGH COURT RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE THE LD. CIT(A) AS WELL AS BEFORE US ARE OF NO ASSISTANCE TO THE ASSESSEES CASE. FURTHER THE FACTS OF THE PRESENT CASE ARE QUITE DISTINGUISHABLE FROM THE FACTS OF THOSE CASES RELIE D UPON BY THE LD. COUNSEL FOR THE ASSESSEE. SINCE THE VARIOUS DECISIONS RELI ED UPON BY THE LD. COUNSEL FOR THE ASSESSEE HAD NO BENEFIT OF CONSIDERING THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SHRI RAM HONDA PO WER EQUIPMENTS & ORS. (SUPRA) AND CIT VS. DELHI BRASS AND METAL WORK S LTD. AS WELL AS THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF LI BERTY INDIA VS. CIT (SUPRA) THEY WOULD NOT GIVE ANY ASSISTANCE TO THE ASSESSEES CASE. IN THE LIGHT OF THESE FACTS WE DO NOT FIND IT FIT TO BURD EN THIS ORDER BY DISCUSSING THOSE CASES RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE AND THEY SHALL BE DEEMED TO BE CONSTRUED AS NOT APPLICABLE TO THE FAC TS OF THE PRESENT CASE ITA NO. 4725/DEL/2009 30 WHICH IS COVERED BY PRINCIPLES ENUNCIATED BY JURISD ICTIONAL HIGH COURT AS WELL AS SUPREME COURT AS DISCUSSED ABOVE. 28. IN THE LIGHT OF THE DISCUSSIONS MADE ABOVE THE GROUND REGARDING THE ASSESSEES CLAIM OF DEDUCTION ON INTEREST INCOME EA RNED ON FDR U/S. 10A(1) IS REJECTED AND THE ISSUE IS DECIDED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. THE ORDER OF THE CIT(A) ON THIS ISSUE IS THUS UPHELD ACCORDINGLY. 29. THE NEXT ISSUE RAISED BY THE ASSESSEE IN THIS A PPEAL IS WITH REGARD TO THE CHARGING OF INTEREST U/S. 234B AND 244A OF THE ACT WHICH IS FOUND TO BE CONSEQUENTIAL IN NATURE. THUS THE AO SHALL EXAMIN E THIS ISSUE AND WORKOUT THE ACTUAL AMOUNT OF INTEREST CHARGEABLE U/S. 234B AND 244A AS PER PROVISIONS OF LAW CONTAINED IN THAT BEHALF. 30. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR A STATISTICAL PURPOSE AS GROUND RELATING TO THE CHARG ING OF INTEREST U/S. 234B AND 244A HAS BEEN RESTORED BACK TO THE FILE OF THE AO FOR REWORKING AS PER LAW. 31. THIS DECISION IS PRONOUNCED IN THE OPEN COURT O N 30 TH APRIL 2010. SD/- (SHAMIM YAHYA) ACCOUNTANT MEMBER SD/- (C.L. SETHI) JUDICIAL MEMBER DATED: 30 TH APRIL 2010 *NITASHA COPY TO: ITA NO. 4725/DEL/2009 31 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT NEW DELHI. BY ORDER DEPUTY REGISTRAR