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TMI Blog2012 (7) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... on – interest received from trade debtors for late payment of sales consideration is income derived from the business of the industrial undertaking and it cannot be excluded from the profits of the industrial undertaking while computing deduction u/s 80-I" - Decided in favor of assessee. Sale of scrap - exclusion - Held that:- Deduction u/s 80IB(10) cannot be allowed on income generated from sale of scrap - Decided against the assessee. - I.T.A. No.2880/Ahd/2011 - - - Dated:- 31-5-2012 - Shri D.K. Tyagi, Shri A. Mohan Alankamony, JJ. Department by : Shri B.K.S. Pandya, CIT- D.R. Assessee by : Shri Milin Mehta, A.R. ORDER PER : D.K. TYAGI, JUDICIAL MEMBER This is Revenue s appeal against the order of ld. CIT(A) dated 26.09.2011 passed in appeal No.CAB/II-157/10-11. 2. The Revenue has taken two grounds. The first ground relates to disallowance of claim of deduction u/s 80IB(10) of Rs.4,59,94,673/- made by the A.O. which has been deleted by ld. CIT(A). 3. The assessee in its return of income claimed deduction u/s 80IB(10) which was disallowed by the A.O. on the ground that the assessee was not the owner of the property. The permission was not gra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Radhe Developers cannot be applied universally without looking into the development agreement entered into by the Developer along with the landowner. In the case of Shakti Corporation since the assessee has filed copy of the development agreement and crux of the agreement is that the assessee has purchased the land and has developed the housing project at its own, therefore, we are of the view that the assessee will be entitled for the deduction u/s 80IB(10). The decision of the Hon ble Supreme Court in the case of Faqir Chand Gulati (supra) will not assist the Revenue, as the agreement is not sharing of the constructed area. In other cases the copy of agreement since has not been submitted before us, if submitted, the terms and conditions of the agreement were not specifically argued before and placed before us, we therefore, in the interest of justice and fair play to both the parties set aside the order of the CIT(A) and restore all other appeals to the file of the Assessing Officer with the direction that the Assessing Officer shall look into the agreement entered into by each of the assessee with the landowner and decide whether the assessee has in fact purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e before the High Court of Gujarat, the contention put forth by the assessee has not accepted as concluded at Para 25 of the assessment order. Since the Assessing Officer, after due verification, has stated that the assessee is responsible for the risk and costs involved in both these projects, the conditions prescribed in the Shakti Corporation case cited above, have been met. Hence, as held by Hon ble Ahmedabad ITAT in the case of M/s Shakti Corporation and Others, the assessee is entitled to deduction u/s. 80IB(10). The Department having challenged these decisions of Ahmedabad ITAT in the Gujarat High Court, will not preclude the appellant from getting relief at the level of CIT(A). Therefore, for the year under consideration, following the above mentioned judgments of Hon ble Ahmedabad ITAT, the claim of the appellant for deduction u/s 80IB(10) is allowed. Since the ld. CIT(A) has given relief to the assessee by placing reliance on the decisions of Hon ble ITAT Ahmedabad in the case of ITO and Otrs. Vs. Shakti Corporation Baroda in ITA No.1503/Ahd/2008 which in turn was passed by Hon ble ITAT following the decision of Hon ble Apex Court in the case of Faquir Chand Gulati ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erein it has been held that sale of scrap generated during the manufacturing process is eligible for deduction u/s 80IB of the Act. We therefore submit that the addition is required to be deleted. Interest received on delayed payments from customers:- The issue is now directly covered by the decision of the Gujarat High Court in the case of Nirma Industries Ltd. v. Dy. CIT reported 202 CTR 198 (Guj)/283 ITR 402 (Guj). It was held that Interest received from trade debtors for late payment of sales consideration interest received from trade debtors for late payment of sales consideration is income derived from the business of the industrial undertaking and it cannot be excluded from the profits of the industrial undertaking while computing deduction u/s 80-1. Since the issue is a covered issue we request your kind office to allow the deduction on the same. Sundry Balance written off: The amounts have been generated during the course of business. In case of supplier payments sometimes the Appellant deducts some amounts and pays the bills. Since the amounts are generated during the course of business the same are eligible for deduction u/s 80IB(10) of the Act. We may further ..... X X X X Extracts X X X X X X X X Extracts X X X X
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