9911796707
TMI Blog2016 (2) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. On the facts and circumstances of the case and in law, the ld. CIT(A) has erred in holding that the income from scrap sales of Rs. 6,28,68,049/- is eligible for deduction u/s 80IB. 2. It is therefore prayed that the order of the ld. CIT(A) be set aside and that of the Assessing Officer be restored. 2. Brief facts of the case are that the assessee firm is engaged in the business of manufacturing of transformer parts/core being located in the Union Territory of Daman which is a backward area as specified in the VIII schedule to the I.T. Act. The assessee filed its return of income on 29.09.2009 declaring total income of Rs. 22,68,68,410/-. The case was selected for scrutiny assessment u/s CASS in view of clause of the Action Plan Targe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85 (Guj). Since the facts and circumstances are same in this year also, the relief was granted to the appellant and the AO is directed to include income from scrap sales for giving benefit u/s 80IB of the Act. Thus, this ground is allowed." 3. Aggrieved, the Revenue is now in appeal before us. 4. The ld. DR supported the order of Assessing Officer. On the other hand the ld. AR supported the order of ld. CIT(A) and submitted that the issue is covered in favour of assessee by the several decisions of the Tribunal (copies of orders placed on record) and even by the decision of Hon'ble Gujarat High Court in the case of CIT vs. Jikar A. Saiyed in Tax Appeal No.368 of 2008 dated 21/12/2013. Accordingly she requested that the issue may be decid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2014) 42 taxmann. 403 (Guj) CIT vs. Jikar A Saiyed. Both views hold that income arising from sale of scrap is eligible for section 80IB deduction as derived from the manufacturing activity in question. We follow the hon'ble jurisdictional high court against that of the learned co-ordinate bench and reject the Revenue's first substantive ground." 6. Further we find that the issue in appeal has also been dealt by Hon'ble Gujarat High Court in the case of CIT vs. Jikar A. Saiyed (supra) wherein it has been observed as under :- "4.0. The short question which is posed for consideration of this Court is whether on the facts and circumstances of the case and in law the Appellate Tribunal is right in holding that the deduction under Section 80I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the Tribunal has rightly come to the conclusion that the items covered by question No. 5 are covered by section 80.I of the Act inasmuch the amount received can be said to have been received from the activities undertaken by the Assessee. He submitted that no question of law is raised, more particularly, when a Division Bench of this Court in Income Tax Application No. 70 of 1997 had considered a similar question and held that "it was, however, found that the items of kasar and sale of empty soda ash bardans, as directly connected with the manufacturing activities of the assessee and should be allowed". It is required to be noted that if the Assessee was not engaged in industrial activities, there was no question of empty barrels or barda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and parcel of the manufacturing process of the industrial undertaking. These receipts could not be said to be independent income of the manufacturing activities of the undertaking of the assessee and thus could not be excluded from the profits and gains derived from the industrial undertaking for the purpose of computing deduction under Section 80IB.These were gains derived from the industrial undertaking and so entitled for the purpose of computing deduction under Section 80IB. There could not be any two opinions that manufacturing activity of the type of material being undertaken by the assessee would also generate scrap in the process of manufacturing. The receipts from sale of scrap being part and parcel of the activity and being proxim ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
