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2015 (11) TMI 108 - ITAT CHENNAI

2015 (11) TMI 108 - ITAT CHENNAI - TMI - Computation of allowable deduction u/s.80-IB - CIT (A) directing the AO to include the Cylinder Transport charge for the purpose of computation of allowable deduction - Held that:- On examining the facts of the case it is revealed that the Central Excise Department has included the cylinder transport charges as a part of the sale consideration for the sale of liquid carbon dioxide; accordingly, they have levied central excise duty on the same. When one wi .....

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not have direct nexus with the assessee's industrial undertaking and therefore, the assessee is not entitled to the benefit of 80-IB of the Act are not acceptable. When the expenditure incurred towards transport charges for procuring raw materials is treated to have direct nexus with the assessee's industrial undertaking and allowed as deduction, the delivery charges of the finished product i.e., liquid carbon dioxide should also have to be treated in the similar manner as having direct nexus wi .....

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.444/13-14/A-15 passed under Sec.143(3) read with section Sec. 250 of the Act. 2. The Revenue has raised three elaborate grounds in its appeal; however the crux of the issue is that the Ld. CIT (A) has erred in directing the AO to include the Cylinder Transport charge for the purpose of computation of allowable deduction u/s.80-IB of the Act. 3. The brief facts of the case are that the assessee is a company, engaged in the business of manufacturing and trading in CO2 Gas and Dry ice, filed its r .....

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that the transport charges received by the assessee did not amount to income derived from the manufacturing activity of CO2 Gas and dryers by the assessee. The Ld. Assessing Officer further opined that only the profits and gains derived from the business of manufacturing activity of producing any article or thing qualifies for deduction U/s.80-IB of the Act. Since ₹ 1,94,63,923/- was received by the assessee towards cylinder transport charges, the Ld. Assessing Officer excluded the same f .....

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No.275/11/2012- IT (B)] dated 17.10.2012 because the issue mentioned in the Circular was with respect to tax deducted at source on gas transportation charges paid by the purchasers of natural gas wherein it was clarified as follows:- "4. It is clarified that in case the Owner/Seller of the gas sells as well as transports the gas to the purchaser till the point of delivery, where the ownership of gas to the purchaser is simultaneously transferred, the manner of raising the sale bill (whether .....

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er/Seller will not alter the position." 5. On appeal, the Ld. CIT (A) held the issue in favour of the assessee and directed the Ld. Assessing Officer to include the cylinder transport charges for the purpose of computation of deduction U/s.80-IB of the Act by observing as follows:- "5.2.1 The facts of the present case with respect to claim of transport charges are identical to the facts of the case prevailing in the A.Y 2005-06 decided by CIT(A)-V in the order dated 04.04.2011. The AR .....

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er service charges and rental income, the AR of the appellant could not furnish any substantial evidence in support of its claim. I find that the cylinder service charges, transport charges (In the rectification order U/s.154 of the Act Transport Charge is deleted) and hydraulic testing charges are not derived from the industrial undertaking eligible U/s.80-IB of the IT Act following the ratio of the decision of the Supreme Court in the case of Cambay Electric Supply Industries Ltd Vs. CIT 113 I .....

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of the order of the Ld. Assessing Officer while as the Ld. A.R. relied on the order of the Ld. CIT (A). 7. We have heard both the parties and carefully perused the materials available on record. From the order of the Ld. CIT (A) it is evident that he has decided the issue in favour of the assessee by relying on the decision of his predecessor in the assessee's own case for the assessment year 2005-06 by the order dated 04.04.2011. Moreover, on examining the facts of the case it is revealed t .....

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