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2016 (5) TMI 1368 - AT - Income TaxExcise Duty refund received - whether the receipt constituted as capital receipt not liable to tax - Held that:- The issue is covered in favour of the assessee by order of ITAT Chandigarh Bench in the case of the same assessee for preceding assessment year 2009-10 in which the CIT(Appeals) deleted similar addition also confirmed by ITAT [2016 (5) TMI 929 - ITAT CHANDIGARH] as held the central excise duty refund does not appear to bear the character of income since what is refunded to the assessee is the amount paid under the modalities provided by the Department of Revenue for giving effect to the exemption notifications. There is also nothing to suggest that the assessee has recovered or passed on the excise duty element to its customers. The issue of payment of central excise duty would not arise in the absence of any industrial activity. There is, therefore, an inextricable link between the manufacturing activity, the payment of central excise duty and its refund. - Decided in favour of the assessee. Addition on account of rebate and discount relates to purchase of material which was shown on the credit side of the Profit & Loss Account - eligible for deduction under section 80IB - Held that:- CIT(Appeals) correctly found that impugned rebate and discount relates to purchase of material. The assessee has not deducted this amount from the purchases but has shown it separately on credit side of the Profit & Loss Account. Similarly, disallowance made under section 80IB of the Act on rebate and discount was allowed by the ld. CIT(Appeals) in the case of sister concern of the assessee M/s Industrial Equipment Co. in assessment year 2006-07 and therefore, following the order of his predecessor, ld. CIT(Appeals) correctly allowed this ground of appeal of the assessee.
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