TMI Blog2012 (10) TMI 814X X X X Extracts X X X X X X X X Extracts X X X X ..... the raw material which was nothing but a part and parcel of the manufacturing process of the industrial undertaking & gains derived from industrial undertakings and so entitled for the purpose of computing deduction under Section 80IB as decided in CIT – III Versus Sadhu Forging Ltd. [2011 (6) TMI 9 - DELHI HIGH COURT] - FAA was right in holding that the assessee is entitled to deduction of conversion and testing charges earned by the assessee for doing job work on the facts and circumstances of the case - against revenue. Interest received from customers for delayed payments - exclusion of only net interest income - Held that :- As decided in Nirma Industries Limited Versus Deputy Commissioner of Income-Tax [2006 (2) TMI 92 - GUJARAT H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derived from industrial undertaking and erred in acknowledging sub section 2 (iii) to s.80 IB which reveals that it is mandatory that the deduction is available to only that industrial undertaking which manufactures or produces any article or thing in other words, the deduction is available only to eligible industrial undertaking which is specifically provided for sub section 2(iii) of section 80 IB. 3. Whether on the facts and circumstances of the case, the ld.CIT(A) erred in admitting the fact that assessee has failed to establish the fact that by carrying out the work of conversion and testing, it has manufactured or produced any article or thing from which it is deriving any income. This clearly indicates that the conversion/testin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue of disallowance of exemption under Section 80 IB of the Income Tax Act, 1961 on interest income from Fixed Deposits. Alternate contention is raised that only net income from interest should have been excluded. 3. We have heard Mr.Aroop Kumar Singh the ld.D.R. on behalf of the Revenue and Mr.Ved Jain, the Ld.Counsel for the assessee. 4. On a careful consideration of the facts and circumstances of the case and perusal of papers on record, we hold as under:- On the nature of conversion charges received, we find that the assessee company manufactures metal alloy ingots. It has also a manufacturing unit of top covers, bottom covers, brake shoes etc. The assessee company manufactures these items not only for self use and sale but a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to ground no.4, we hold that the interest received by the assessee from customers for delayed payments, is eligible for deduction under Section 80 IB of the Income Tax Act, 1961 by applying the decision of the Hon ble Delhi High Court in the case of CIT vs. Advance Detergents Ltd. 339 ITR 81 (Delhi), wherein the Hon ble Court followed the judgement of the Hon ble Gujarat High Court in the case of Nirma Industries Ltd. vs DCIT 238 ITR 402 as well as other similar decisions. Respectfully following the same we dismiss this ground of appeal of the Revenue. 7. Coming to the Cross Objection ground nos. 1 and 2 have to be dismissed in view of the decision of the Hon ble Supreme Court in the case of Liberty India Ltd. vs CIT 183 Taxman 349 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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