2017 (12) TMI 1826 - AT - Income Tax

Deduction u/s. 80lB for Goa Unit - sale of scrap as receipts there from was not income from sale of manufactured Products or By Products of the industrial undertaking - Whether CIT(A) has erred in allowing the appeal of the assessee u/s. 80lB on income earned from sale of scrap when it was not derived from the activities of the eligible business? - HELD THAT - We find that similar issue of claim of deduction u/s. 80IB of the Act on sale of scrap generated out of manufacturing process was treated as business income and the deduction u/s. 80IB of the Act was allowed. The issue arising in the present bunch of appeals filed by the Revenue is identical to the issue in the earlier years 2015 (9) TMI 892 - ITAT PUNE and there is no change in the factual aspect. Accordingly, we uphold the order of Commissioner of Income Tax (Appeals) and dismiss the grounds of appeal raised by the Revenue.

Summary

Issues Involved:
Appeals filed by Revenue against CIT(A)-11's consolidated order for assessment years 2008-09 to 2011-12 regarding deduction u/s. 80IB for sale of scrap not considered as income from manufactured products of industrial undertaking.

Analysis:
The appeals filed by the Revenue against the consolidated order of CIT(A)-11, Pune, focused on the issue of deduction u/s. 80IB of the Income Tax Act 1961 for the sale of scrap not being considered as income from manufactured products of the industrial undertaking. The Tribunal noted that the issue in the present appeals was similar to earlier years and referenced the Tribunal's previous orders in the assessee's case from assessment years 2000-01 to 2007-08. In those orders, the Tribunal had allowed the deduction u/s. 80IB for sale of scrap generated from the manufacturing process, treating it as business income. The Tribunal referred to specific cases and judgments, including the decision of the Hon'ble Madras High Court in the case of M/s. Fenner India Ltd., to support the allowance of the deduction. The Tribunal highlighted that the Revenue failed to challenge the findings on this issue and concluded that since there were no changes in facts and circumstances in the impugned assessment years, there was no reason to take a different view. Therefore, the Tribunal upheld the order of the Commissioner of Income Tax (Appeals) and dismissed the appeals of the Revenue.

The Tribunal emphasized that the issue raised in the appeals by the Revenue was identical to the issue in the earlier years, with no change in the factual aspect. Consequently, the Tribunal upheld the order of the Commissioner of Income Tax (Appeals) and dismissed the grounds of appeal raised by the Revenue. The Tribunal further clarified that the facts and issues in other related appeals were identical to the main appeal, and the decision in the main appeal would apply mutatis mutandis to those appeals as well. Ultimately, the Tribunal pronounced the order on December 21, 2017, dismissing all the appeals of the Revenue.