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2018 (3) TMI 880 - AT - Income TaxRevision u/s 263 - whether PCIT(Central) has wrongly passed order u/s 263 on the issue already decided by the Assessing Officer in order passed under section 153A(1)(b) r.w.s 143(3) - excise incentive is not eligible for deduction - Held that:- We find that the companies availing the benefit of notification no. 56/2002 CE dt. 14/11/2002 to Central Excise which under a special procedure the manufacturers located in J&K first pay excise duty and cess and there after claim the refund of the same under Central Excise Tariff. Thus it makes an integral part of the profits of the business which would be eligible for deduction under section 80IB. The order of the Pr. CIT holds that the excise incentive is not eligible for deduction which is in contravention with the established judicial position as detailed above. Hence, the order of the Ld. Pr. CIT cannot be held to be valid under this head. Regarding the FDR's from the perusal of the record and submissions it was found that the FDR's have been made for the purpose of electricity connection for the Jammu Unit. Since the FDR's have been made out of business compulsion, the interest earned would be eligible for deduction under section 80IB. Reliance is placed on the judgment of Hon'ble Delhi High Court in the case of Pr. CIT Vs. Universal Precision Screws in ITA No. 392/2015 dt. 06/10/2015 and also on the judgment of Hon'ble Delhi High Court in the case of Riviera Home Furnishing Vs. Addl. CIT [2015 (11) TMI 1139 - DELHI HIGH COURT] The sale of scrap is an integral part of the manufacturing activity thus it would be directly related to business and eligible for deduction. Reliance is placed on the judgment of Hon'ble Delhi High Court in the case of CIT Vs. Saadhu Forging Ltd. [2011 (6) TMI 9 - DELHI HIGH COURT]. Similarly the misc. income written off of ₹ 1,222/- is a part of the business income and would be eligible for deduction. Since the additions proposed by the Pr. CIT on account of excise incentives, sale of scrap, interest on FDR's are squarely covered by the judicial precedence's, it cannot be said that allowing of such deduction by the Assessing Officer is erroneous or prejudicial to the interest of Revenue. Hence we found no justification in invoking the provisions under section 263 - Decided in favour of assessee.
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