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2014 (11) TMI 842 - AT - Income TaxAllowability of deduction u/s 80IB - Assessee was having factory license before it started manufacturing activities or not Commencement of business activity on or before 31.03.2004 or not Held that:- CIT(A) rightly held that factory license is not a necessary condition for eligibility of deduction u/s 80IB - assessee is entitled to the benefit of Section 80IB of the Income Tax Act, 1961 - the AO did not doubt about raw material consumption, power consumption, sales and employment of workers for the purposes of denying the benefit of section 80IB - for the purpose of Section 80IB of the Act, what is essential is that the assessee should manufacture or produce an article or thing and if there is any violation of any provisions of any other statutes then the assessee has to explain the same to the authorities implementing those Acts/Statutes and the same cannot be the basis of denial of benefit under Section 80IB of the said Act the order of the CIT(A) is upheld Decided against revenue. Disallowance of remuneration to partners deleted Held that:- CIT(A) rightly held that the clause is vague in nature and does not even prescribe the method of calculating the remuneration - remuneration cannot be thrust upon the appellant so this ground of appeal is allowed - though Assessee had not claimed remuneration to partners, AO had allowed the same - the clause relating to remuneration in the partnership deed is vague in nature and does not prescribe the method of calculation of remuneration - Revenue has not brought any contrary binding decision in its support nor has been able to distinguish the judgments relied upon by the CIT(A) the order of the CIT(A) is upheld Decided against revenue. Deletion of disallowance u/s 40(a)(ia) Disallowance in next year on payment basis amounts to double benefit to assessee or not Held that:- CIT(A) rightly was of the view that the deduction u/s.80-IB was not granted to the appellant on the disallowance made on technical ground - the deduction u/s.80-IB has to be granted on the computed income derived from the industrial undertaking - any addition/disallowance made during the course of assessment do not lose the characteristic of being derived from the industrial undertaking as its original source the order of the CIT(A) is upheld Decided against revenue. Expenses on labour charges u/s 40A(2)(b) Held that:- CIT(A) rightly allowed the claim of Assessee has held that the labour charges paid by the Assessee was for different gauge specification of finished goods and therefore the wages rates are different - Revenue has not been able to controvert the findings of CIT(A) nor could controvert the submissions of Assessee the order of the CIT(A) is upheld Decided against revenue.
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