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2016 (7) TMI 1050 - AT - Income TaxAllowing deduction u/s 80IE - technical services receipts treated by assessee itself as income from other sources - Held that:- Undisputedly, there is no dispute that amount relates to manufacturing of eligible article or thing. The revenue has not doubted or placed any material on record suggesting that what the assessee has manufactured is not eligible or the undertaking is not eligible for the benefit of deduction as provided under section 80IE of the Act. The only objection of the revenue is that the assessee itself has taken such receipts as Income from other sources. Since the source of these receipts is manufacturing, the revenue has not placed any material on record to demonstrate that these receipts do not pertain to the manufacturing of the undertaking. In the absence of such specific material, we are of the considered view that the AO was not justified in declining the deduction as available u/s 80IE of the Act. - Decided in favour of assessee Deduction u/s 80IE in respect of foreign currency fluctuation - Held that:- Assessee is a JV concern, which sources its raw materials locally and also imports a substantial part from international market. For imported raw materials, payments are being made in foreign currencies, which are quite volatile, there is no dispute in this regard. The foreign currency gain is the part of raw material there is nothing wrong in this claim. Assessee is entitled for deduction u/s 80IE of the Act, on this also.The revenue has not rebutted these findings by placing any contrary material on record. It is also not the case of the revenue that the raw material as imported by the assessee was not utilized in the manufacturing process. Therefore, we do not see any reason to interfere into the order of ld. CIT (A) in allowing claim - Decided in favour of assessee Addition on account of disallowance of deduction by the income earned by way of excess provision written back - Held that:- The amount written off pertains to sundry creditors. It’s an excess provision made for some expenses, not made in the current year but booked excess in earlier years and once it is reversed i.e. written back, assessee has to offer for taxation. This is perfectly correct as per accountancy principle. As such, this is the expenditure, which has been booked in excess in earlier year and by this amount the deduction u/s 80IE has been reduced in the said year since the deduction is available for the unit for consecutive 10 years. AO’s action in treating the excess provision written back as income cannot be justified, hence deleted.- Decided in favour of assessee
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