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2014 (3) TMI 623 - HC - Income TaxEligibility for deduction u/s 80IB of the Act Transport subsidy, insurance subsidy, power subsidy and central excise refund Held that - The decision in Commissioner of Income-tax Versus Meghalaya Steels Ltd. and M/s Pride Coke Pvt. Ltd. 2013 (7) TMI 175 - GAUHATI HIGH COURT followed the assessee is eligible for the deductions u/s 80IB of the Act - the appeals filed by the revenue are dismissed and the order passed by the Tribunal is affirmed - Decided against Revenue.
Issues:
1. Interpretation of deductions under Section 80 IB of the Income Tax Act, 1961 based on subsidies received. Analysis: The High Court considered an appeal filed under Section 260 A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal. The main issue revolved around the eligibility of deductions under Section 80 IB concerning subsidies received by an Industrial Undertaking. The court focused on whether subsidies like transport, insurance, power, and central excise refund should reduce expenses and impact profits for deduction eligibility under Section 80 IB. The first substantial question of law was whether the subsidies received should reduce expenses incurred under a specific head, affecting the profits of the business and thus making the business eligible for deduction under Section 80 IB. The second question was whether these subsidies, being interlinked and having a direct nexus with manufacturing activities, should be considered inseparable from the expenses incurred by the assessee, making them allowable for deduction under Section 80 IB. The court noted that the issue in this appeal was similar to previous cases and referred to a Division Bench order that dismissed similar appeals. The court, in its order, decided that since the questions raised in this appeal were identical to those in previous cases where the appeals were dismissed, this appeal would also meet the same fate. Consequently, the court dismissed the appeal based on the reasoning and conclusion arrived at by the Division Bench in their previous order. The court directed to keep a copy of the previous order in the file as part of the record, concluding the judgment on the matter.
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