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TMI Blog2014 (1) TMI 1782X X X X Extracts X X X X X X X X Extracts X X X X ..... AY 2007-2008 against the order of the CIT (A)-23, Mumbai dated 7.9.2010. In this appeal, Revenue raised the following grounds which read as under: "1. On the facts and circumstances of the case and in law, the Ld CIT (A) erred in directing the AO to allow deduction u/s 80IB of Rs. 8,50,23,349/- in respect of profits and gains of business of three new industrial undertaking i.e., Unit II, Unit III and Falaudi Unit without appreciating the fact that as the activities of these units do not constitute manufacture or production of any articles or things as specified in section 80-IB of the Act. 2. The appellant prays that the order of the CIT (A) on the above ground/s be set aside and that of the AO be restored." 3. At the outset, Ld Counsel for the assessee brought our attention to the above ground no.1 raised by the Revenue and mentioned that an identical issue has been raised by the Revenue before the Tribunal in assessee‟s own case vide ITA No.4451 and 4452/M/2008 for the AY 2004-2005 and 2005-06, dated 20.11.2009. In this regard, Ld Counsel read out the relevant para 4 to 9 of the said order of the Tribunal (supra), wherein the Tribunal had decided the issue in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elling circumstances, to take a different view than the view taken by the ITAT consistently, therefore, the relief cannot be withdrawn and the proper forum for the Revenue is to approach the Hon‟ble High Court for this year also since they have approached the High Court for the earlier years. Since, the CIT (A) has followed the orders of the ITAT for the earlier years. Therefore, respectfully following the orders of the ITAT for the earlier years, we uphold the order of the CIT (A) and the grounds raised by the Revenue are dismissed." 6. From the above, the ITAT has been consistently granting relief to the assessee by holding that the activity of the assessee is a manufacturing activity and therefore, it is eligible for deduction u/s 80IA of the Act. As well, no contrary material has been brought to our notice by the Revenue to take a different view than that of the earlier views taken by the ITAT. Therefore, in these circumstances, following the principle of consistency, we are of the considered opinion that the assessee should get relief and accordingly the grounds raised by the Revenue are dismissed. 7. In the result, appeal of the Revenue is dismissed. C.O. No.138/M/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attention to the breakup of interest receipts and submitted that the interest received from customers for delayed payments amounting to Rs. 70,92,221/-should be regarded as sale consideration and therefore, the assessee should be entitled to deduction in respect of the same u/s 80-IB of the Act. Further, Ld Counsel submitted that the interest received from customers for delayed payments would qualify for deduction under section 80IB of the Act. In support of his contention, Ld Counsel relied on the following decisions. i) CIT vs. Vidyut Corporation 324 ITR 221 (Bom) ii) CIT vs. Advance Detergents Ltd 339 ITR 81 (Del) iii) Nirma Industries Ltd vs. Dy. CIT 283 ITR 402 (Guj) iv) Phatela Cotgin Industries Pvt Ltd vs. CIT 303 ITR 411 (P & H) v) CIT vs. Flander Macneill Gears Ltd 150 ITR 83 (Cal) vi) Tata Sponge Iron Ltd vs. CIT 292 ITR 175 (Ori) and vii) CIT vs. Indo Matsushita Cargbon Co Ltd 286 ITR 201 (Mad) 11. Referring to the interest received from loans and advances to staff, which is earned from loans and advances provided to the employees of the eligible undertakings, Ld Counsel submitted that since, the said receipt is inextricable connected with the undertaking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon‟ble High Courts as well as the Hon‟ble Supreme Court, we are of the opinion that the interest derived on margin money for the purpose of obtaining bank guarantee should be assessed as „business income‟ instead of „income from other sources‟. Accordingly, we decide this part of the ground in favour of the assessee. 17. Regarding the issue raised in ground no.3 with regard to benefit of netting off of interest income against the expenditure and the same was raised without prejudice. In this regard, it was argued by the Ld Counsel that whether the impugned interest is assessed under the head „business income‟ or „income from other sources‟, if it is held that the said receipts do not qualify for deduction u/s 80IB of the Act, then the exclusion for the purposes of ascertaining the income qualifying for deduction has to be the „net interest income and not the „gross interest receipt‟. In support of his contention, Ld Counsel relied on the judgment of the Hon‟ble Supreme Court in the case of ACG Associated Capsules P. Ltd vs. CIT (343 ITR 89). In this connection, both the parties stated that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue Authorities as well as cited order of the Tribunal dated 20.11.2009 (supra). On perusal of the said order of the Tribunal, we find para 16 is relevant in this regard and the same reads as under: "16. We have considered the rival arguments and made both the sides, perused the orders of the Assessing Officer and the CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions relied on by both the sides which are already incorporated in the body of the assessment order and in the order of the CIT (A). We find all the three units were set up at a different point of time. We further find the CIT (A) has given a categorical finding that the assessee has invested huge amounts for factory building, plant and machinery and electrical installations, etc., separately for the units 2 and 3, a fact which has not been controverted by the Revenue. We further find nothing has been brought on record by the revenue authorities that the profits of Unit 2 and 3 are inflated or the profits of the unit 1 are suppressed. Nothing has been brought on record to show that machineries of Unit 1 were transferred to Unit 2 or unit 3. We further find the CIT ..... 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