Disallowance of deduction u/s 10B of miscellaneous income

Last updated: 18 January 2021

Save Share

Quick Summary

This Income Tax Appellate Tribunal case concerns the disallowance of deductions under Section 10B for miscellaneous and interest income. The assessee argued that these incomes were profits of the undertaking and thus eligible for the deduction. However, the tribunal's decision, as confirmed by the CIT(Appeals), suggests these specific income types were not considered eligible for the Section 10B benefit.

Court :
ITAT New Delhi

Brief :
These two appeals by the assessee are directed against acommon order dated 30/03/2017 passed by the learned CIT(Appeals)-31, New Delhi [in short ‘the Ld. CIT(A)’] for assessment years 2010-11 and 2011-12 respectively. As common issue in dispute are involved in both the appeals, same were hard together and disposed off by way of this consolidated order forconvenience.

Citation :
ITA 4469/DEL/2017

IN THE INCOME TAX APPELLATE TRIBUNAL,
DELHI BENCH: ‘B’ NEW DELHI

BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
AND
SHRI O.P. KANT, ACCOUNTANT MEMBER
[Through Video Conferencing]

ITA Nos. 4468 & 4469/Del./2017
Assessment Years: 2010-11 & 2011-12

M/s. Continental Engines
Pvt. Ltd.,
3rd Floor, Tower-D, Global
Business Park, M.G. Road,
Gurgaon
PAN :AABCC9896N
(Appellant)

Vs.

DCIT,
Central Circle-26,
New Delhi
(Respondent)

ORDER

PER O.P. KANT, AM:

These two appeals by the assessee are directed against acommon order dated 30/03/2017 passed by the learned CIT(Appeals)-31, New Delhi [in short ‘the Ld. CIT(A)’] for assessment years 2010-11 and 2011-12 respectively. As common issue in dispute are involved in both the appeals, same were hard together and disposed off by way of this consolidated order forconvenience.

2. The grounds raised in ITA No. 4468/Del/2017 forassessment year 2010-11 are reproduced as under:

1. The addition by way of reduction in claim of 10B has no nexus tothe search and seizure operation and consequently the order u/s153A/143(3) in so far as reduction in the claim of 10B is wrongand bad in law and should be deleted.

2. Without prejudice, the Id. CIT(A) has erred in confirming the AO’s order and reducing the claim u/s 10B with respect to Misc.income and interest income. Both the incomes are profits of the business of the undertaking and eligible for 10B deduction.

3. The above grounds are independent of and without prejudice to one another.

4. The appellant prays that he may be allowed to add, alter, amend or delete any of the grounds at the time of hearing.

To know more in details find the attachment file

FAQ :

The main issue is the disallowance of deductions claimed under Section 10B of the Income Tax Act for miscellaneous income and interest income.

The assessee argued that both miscellaneous income and interest income were profits derived from the business of the undertaking and therefore should be eligible for the Section 10B deduction.

The Assessing Officer (AO) reduced the claim under Section 10B, and the learned CIT(Appeals) confirmed the AO's order, disallowing the deduction for miscellaneous and interest income.

Based on this judgement, it appears that miscellaneous income and interest income were not considered eligible for the Section 10B deduction by the tax authorities.