2010 (2) TMI 1188 - AT - Income Tax

Summary

Issues involved: Denial of deduction under section 80IB of the Income Tax Act, 1961 and challenging the interest under section 234B of the Act.

Denial of deduction under section 80IB:
The appellant claimed deduction under section 80IB for manufacturing and producing Agron Gas, arguing that the process involved mechanical functions and was subject to Excise duty. Despite previous rejections, the appellant cited a recent Supreme Court case defining "manufacture" and "production" to support their claim. The Departmental Representative opposed restoring the matter, citing previous Tribunal decisions. The Tribunal acknowledged the lack of the new definition and Supreme Court ruling when the initial decision was made, thus remanding the issue to the Assessing Officer for reconsideration in light of the updated definitions and legal precedent. The appellant was directed to provide necessary evidence to support their claim, and the interest under section 234B was deemed consequential.

Challenging the interest under section 234B:
The interest under section 234B was challenged as consequential to the denial of deduction under section 80IB. The Tribunal, after considering the updated definition of "manufacturing" and the Supreme Court ruling, remanded the matter to the Assessing Officer for fresh consideration. The interest under section 234B was upheld as a consequential aspect of the deduction issue.