Subscribe to the Bombay Chartered Accountant Journal Subscribe Now!

February 2013

Industrial undertaking: Deduction u/s. 80-IC: A. Y. 2004-05: Interest received for delay in payment for goods: Is income derived from industrial undertaking: Eligible for deduction u/s. 80-IC:

By K. B. Bhujle, Advocate
Reading Time 1 mins
fiogf49gjkf0d
CIT Vs. Universal Pipes (P) Ltd.; 254 CTR 311 (Gau):

The assessee was engaged in the manufacture and sale of PVC pipes. The assessee was entitled to deduction u/s. 80-IC. In the relevant year, the assessee had received an amount of Rs. 3,13,19,602/- by way of interest from the irrigation department, as per the order of the High Court, for the delay involved in the payment in connection with delivery of goods. The Assessing Officer disallowed the claim for deduction u/s. 80-IC in respect of this amount. The Tribunal allowed the assessee’s claim.

On appeal by the Revenue, the Gauhati High Court upheld the decision of the Tribunal and held as under:

“Interest received from the Irrigation Department as per the order of the Court for the delay involved in the payment in connection with delivery of goods to Irrigation Department constituted income derived from the industrial undertaking of the assessee and is eligible for deduction u/s. 80-IC.”

Download PDF

You May Also Like

Income from undisclosed sources: Reference to DVO: S/s. 69 and 142A: A. Y. 1989-90: Rejection of books of account is prerequisite for valid reference to DVO for valuation u/s. 142A: Report of DVO pursuant to invalid reference could not be a basis for addition u/s. 69:

Reassessment: S/s. 115AD, 147 and 148: A. Y. 2006-07: Validity to be determined with reference to reasons recorded for belief: Assessment u/s. 143(1) determining Nil income: Notice u/s. 148 on the ground that that section 115AD may be applicable: Not valid: