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TMI Blog2012 (6) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... ed were for erection testing and commissioning of the units sold and were part of the receipts of the industrial undertaking come within the meaning of the profits and gains derived by the undertaking or an enterprise from any business and scrap sales also qualify for consideration under Section 80IA of the Act – in favour of assessee. - TC(A). No. 677 of 2005 - - - Dated:- 25-4-2012 - Mrs.Justice CHITRA VENKATARAMAN, Mr.Justice K.RAVICHANDRA BAABU, JJ. For Appellant : Mr.T.Ravikumar For Respondent : Mr.R.Vijayaraghavan JUDGMENT CHITRA VENKATARAMAN, J. The Revenue is on appeal as against the order of the Income Tax Appellate Tribunal relating to assessment year 1992-93. The above Tax Case (Appeal) was admitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustrial undertaking or enterprise which could not be construed as profits and gains arising from manufacture. The first Appellate Authority held that the sum of Rs.57,28,091/- representing erection charges formed part of the profits. As regards other receipts, the first Appellate Authority held the same view. As to the sale of scrap, the first Appellate Authority pointed out that even by the Assessing Officer's restrictive standards the scrap sales proceeds would fall to be called the profits of the undertaking as held in the decision of this Court reported in [1983] 141 ITR 745 CIT v. WHEELS INDIA LIMITED. Aggrieved by the same, the Revenue went on appeal before the Tribunal, which confirmed the view of the Commissioner of Income Tax (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustrial undertaking .................... " 5. Dealing with the question as to whether duty draw back, DEPB benefits, rebate etc., could be credited against the cost of manufacture of goods debited in the profits and loss account for the purpose of Section 80IA/ 80IB, the Apex Court held that such benefits/ rebates would constitute independent source of income beyond the first degree nexus between profits and the industrial undertaking. It pointed out that the cost of purchase includes duties and taxes (other than those subsequently recoverable by the enterprise from the taxing authorities), freight inwards and other expenditure directly attributable to the acquisition. Hence, trade discounts, rebate, duty drawback and such similar items ..... X X X X Extracts X X X X X X X X Extracts X X X X
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