TMI Blog2018 (3) TMI 880X X X X Extracts X X X X X X X X Extracts X X X X ..... on 80IB. The order of the Pr. CIT holds that the excise incentive is not eligible for deduction which is in contravention with the established judicial position as detailed above. Hence, the order of the Ld. Pr. CIT cannot be held to be valid under this head. Regarding the FDR's from the perusal of the record and submissions it was found that the FDR's have been made for the purpose of electricity connection for the Jammu Unit. Since the FDR's have been made out of business compulsion, the interest earned would be eligible for deduction under section 80IB. Reliance is placed on the judgment of Hon'ble Delhi High Court in the case of Pr. CIT Vs. Universal Precision Screws in ITA No. 392/2015 dt. 06/10/2015 and also on the judgment of H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the Ld. Assessing Officer under section 263 of the Income Tax Act. 3. That the Ld. PCIT(Central) has wrongly passed order under section 263 on the issue already decided by the Assessing Officer in order passed under section 153A(1)(b) r.w.s 143(3) of the Act. 3. Brief facts of the case are that the assessment in the case has been completed under section 153A (1) (b) by the DCIT, Central Circle-2 Chandigarh on 03/03/2014 accepting the returned income. Subsequent to the passing of assessment order the Ld. PCIT, Central Gurgaon has invoked powers conferred by Section 263 and passed an order on 28/03/2016. The order of the Ld. Pr. CIT passed under section 263 of the Income Tax Act, reads as under: A perusal of the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The facts of the case have been considered. The details of other income amounting to ₹ 4,01,69,808/- is as under: Sr. No Particulars Amount 1 Excise Incentives 4,01,20,670/- 2. Interest on FDR 18,931/- 3. Misc. W/OIT 1,222/- 4. Misc. Income 258,985/- Total 4,01,69,808/- 05. The Hon'ble Supreme Court in the case of Liberty India Vs. CIT 317 ITR 218 (SC) held, Continuing our analysis of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to a specified percentage of profits. This is the importance of the words derived from industrial undertaking as against profits attributable to industrial undertaking . Profit generation could be on account of cost cutting, cost, rationalization, business restructuring, tax planning on sundry balances being written back, liquidation of current assets etc. Therefore, we are of the view that duty drawback, DEPB benefits, rebates etc. cannot be credited against the cost of manufacture of goods; debited in the Profit Loss account for purposes of Sections 80-IA/80-IB as such remissions (credits) would constitute independent source of income beyond the fifsCdegree nexus between profits and the industrial undertaking. 6. Fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of CIT Vs. Dharmpal Prem Chand Ltd. 2008 (11) TMI 231 wherein Delhi High Court held that excise incentive is eligible for deduction as it would constitute profits and gains derived from any business. Similarly in the case of Green Field Enterprises Vs. Addl. CIT(2016) (5) TMI 929 the coordinate Bench has treated excise incentive as eligible for deduction. 5. Ld. CIT, DR strongly relied on the order of the Ld. Pr. CIT. 6. We have gone through the judgments quoted and also the order of the Pr. CIT. We find that the companies availing the benefit of notification no. 56/2002 CE dt. 14/11/2002 to Central Excise which under a special procedure the manufacturers located in J K first pay excise duty and cess and there after claim th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dt. 06/10/2015 and also on the judgment of Hon'ble Delhi High Court in the case of Riviera Home Furnishing Vs. Addl. CIT in ITA No. 459/2015 dt. 19/11/2015. 10. The sale of scrap is an integral part of the manufacturing activity thus it would be directly related to business and eligible for deduction. Reliance is placed on the judgment of Hon'ble Delhi High Court in the case of CIT Vs. Saadhu Forging Ltd. 336 ITR 444. Similarly the misc. income written off of ₹ 1,222/- is a part of the business income and would be eligible for deduction. 11. Since the additions proposed by the Ld. Pr. CIT on account of excise incentives, sale of scrap, interest on FDR's are squarely covered by the judicial precedence's, it canno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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