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2020 (9) TMI 609 - AT - Income TaxDisallowance u/s 80IC on account of scrap sales - manufacturing activity of the appellant company - income from sale of scrap are inextricably intrinsically connected with the industrial undertaking and is derived from such industrial undertaking - HELD THAT:- CIT (A) has duly obtained and analyzed unitwise details of scrap sold in the year under assessment and has not noticed any discrepancy therein, the decision rendered by Hon’ble Delhi high court in the case of CIT vs. Sadu Forgings Ltd. [2011 (6) TMI 9 - DELHI HIGH COURT] is applicable to the facts and circumstances of the case. Hence, receipt of scrap sales claimed as deduction by the assessee u/s 80IC is part and parcel of business activities and forms part of the business gains, thus required to be included in the gains from business to be eligible for deduction u/s 80IC. So, we are of the considered view that ld. CIT (A) has erred in disallowing the amount of ₹ 7,08,730/- as deduction from scrap sales u/s 80IC. Consequently, the appeal filed by the assessee is hereby allowed and remaining disallowance claimed by the assessee as deduction u/s 80IC is hereby allowed.
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