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2013 (9) TMI 362 - AT - Income TaxDeletion of Bogus Purchase Held that:- Following Nishant Housing Development Vs. ACIT [1994 (9) TMI 139 - ITAT PATNA] - if any addition was made on the ground of expenditure incurred the source of which was to be treated as unexplained, then similar amount will have to be simultaneously allowed as expenditure to earn that income - rejection of part to be also accepted - On the basis that the purchases have been entered into stock register - Although the linkage of these purchases with the sale was not ascertainable because the purchases of raw material had undergone the various processes before its sale as a finished product - The raw material and finished goods have different entity and cannot have direct link the evidences had clearly shown the authenticity of the purchases - The addition was not justified as per law and facts of the case. Deletion of Payment of Interest for Sales Tax Deposit - Held that:- Non-payment of statutory dues like sales tax, income-tax etc. may entail penalty but late payment of the same may not necessarily attract penalty but interest for such delayed payment/deposit - interest paid by the assessee to the sales tax department on arrears of sales tax/purchase tax was an admissible deduction - Following CIT Vs. Western Indian State Motors [1988 (3) TMI 22 - RAJASTHAN High Court] and CIT vs. Lachhman Das Mathura [1980 (1) TMI 63 - ALLAHABAD High Court ] the addition was directed to be deleted. Deletion of Deduction u/s 80IB - Consideration of interest of FDR for calculating deduction u/s 80IB Income from Business profit from Duty Entitlement Passbook Scheme (DEPB) and Duty Drawback Scheme Held that:- Following M/s Liberty India Versus Commissioner of Income Tax [2009 (8) TMI 63 - SUPREME COURT] - Duty drawback, rebate etc. should not be treated as adjustment (credited) to cost of purchase or manufacture of goods - They should be treated as separate items of revenue or income and accounted for accordingly - for the purposes of AS-2, Cenvat credits should not be included in the cost of purchase of inventories - duty drawback, DEPB benefits, rebates etc. cannot be credited against the cost of manufacture of goods debited in the Profit & Loss account for purposes of Sections 80-IA/80-IB as such remissions (credits) would constitute independent source of income beyond the first degree nexus between profits and the industrial undertaking - Duty drawback receipt/DEPB benefits do not form part of the net profits of eligible industrial undertaking for the purposes of Sections 80I/80-IA/80-IB of the 1961 Act.
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