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TMI Blog2013 (9) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... income by invoking Sec.14A of the Act following his orders for earlier Assessment years. On appeal, the CIT(A) following the decision of his predecessors in appeal No.24/05-06 dt.01.12.05 for the assessment year 2002-2003 in assessee's own case restricted the disallowance to 2% of gross dividend income as expenditure attributable to earning tax free income. 4. At the time of hearing both the parties agreed that the matters should be restored back to the file of the Assessing Officer to adjudicate the issue in the light of the decision of Hon'ble Bombay High Court in the case of Godrej and Boyce Manugacturing Co. Ltd., Vs. DCIT [2010] 328 ITR 81 (Bom.) where it was held that: "that the provisions of rule 8D of the Rules which have been notified with effect from March, 24, 2008, would apply with effect from assessment year 2008- 09. Even prior to assessment year 2008-09, when rule 8D was not applicable, the Assessing Officer had to enforce the provisions of sub-section (1) of section 14A. For that purpose, the Assessing Officer is duty bound to determine the expenditure which has been incurred in relation to income which does nto form part of the total income under the Act. The Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as income for computing deduction u/s.80-IB. However, he held that other income will fall part of profits u/s.80-IB. 8. At the time of hearing, the authorized representative of the assessee submitted that the issue of interest income and lease rent forming a part of eligible business profit for computing deduction u/s.80-IB was covered against the assessee in assessee's own case for the assessment year 2002-03 in ITA No.430 & 661/Mds/06 order dt.12.10.07. He submitted that regarding other income of Rs.8,74,206/- in Assessment year 2003-04 and Rs.16,69,484/- in Assessment year 2004-05 on which deduction u/s.80-IB was allowed to the assessee. Following the order of his predecessors, CIT(A) in Assessment year 2001-02 the details regarding such income are not available either from the assessment order or from the order of the CIT(A) and therefore, the matter may be restored back to the file of the Assessing Officer for afresh adjudication of the issue by bringing of relevant materials on record. 9. The Departmental Representative on the other hand submitted that the other income on which Sec.80-IB was allowed to the assessee pertains to receipts by way of DEPB as will be seen from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the CIT(A) denying deduction u/s.80-IB on profit from forge shop. 12. The brief facts of the case are that the Assessing Officer had denied deduction u/s.80-IB on the income earned from forge shop on the ground that the assessee has not claimed any expenses towards consumption of stores, freight, packing, salary and wages etc. as the assessee has got product manufactured through job work from sub-contractor. In first appeal, assessee submitted before the CIT(A) that the raw materials were produred by the assessee and the products were manufactured by the sub-contractor as per the design and drawings prepared by the assessee under its direct supervision and control including quality checks and final inspection of the products and placed relianced on the decision of CIT V Penwalt India Ltd., 196 ITR 813 (Bom.). CIT(A) after considering the submissions of the authorized representative observed that as per Sec.80-IB(2), it is mandatory that the manufacturing activity should be carried out by the assessee primarily with the help of new plant and machinery. The spirit of the said section is that assessee should be engaged in the manufacturing activity by setting up a new industrial u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.1631,1789,1790/Mds/03 in the case of DCIT Vs. Elgi Ultra Industries Ltd., and in ITA Nos.60,71,72 & 73/Mds/01 in the case of Sundaram Polymers Ltd. Vs. DCIT. The Departmental Representative on the other hand relied on the order of the CIT(A). 14.------ 15. The ground No.4 of the appeal of the assessee in Assessment years 2003-04 & 2004-05 is directed against the order of the CIT(A) confirming the order of the Assessing Officer including scrap sales in the total turnover for computing deduction u/s.80HHC of the Act. 16. The brief facts of the case are that the Assessing Officer observed that the assessee has not included scrap sales of Rs.7,73,44,190/-, though the same forms part of the assessee's total turnover by not including the above sales in the total turnover, the assessee is deriving more benefit of deduction u/s.80HHC, which cannot be allowed. Therefore, work out the deduction u/s.80HHC by including sale proceeds of scrap sales in the total turnover of the assessee. In appeal the CIT(A) confirmed the action of the Assessing Officer observing that various courts are held that numerator and denominator should include the similar receipts while computing deduction u/s.80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appeal of the assessee for the Assessment years 2003-04 & 2004-05 is directed against the orders of the CIT(A) confirming the order of the Assessing Officer reducing the deduction allowable u/s.80HHC by the eligible deduction u/s.80-IB and u/s.80G invoking the provisions of Sec.80-IA(9). 21. The brief facts of the case are that the Assessing Officer while computing the deduction allowable to the assessee u/s.80HHC of the Act reduced from the business profits deduction allowable u/s.80-IB and u/s.80G of the Act, relying on the provisions of Sec.80-IA(9) and u/s.80G(5A) respectively. 22. On appeal, CIT(A) confirmed the action of the Assessing Officer relying on the decision of the Mumbai Bench of the Tribunal in the case of Leben Laboratories Ltd. Vs. DCIT in ITA No.2850/Mum/04 dt.29.09.06. 23. The authorized representative of the assessee argued that the issue is covered in favour of the assessee by decision of the Hon'ble Madras High Court in the case of SCM Creations Vs. ACIT in 304 ITR 319 (Mad) and CIT Vs. MRF Ltd., TC(A) No.1020/09 dt.27.10.09 and Associated Capsules (P) ltd. Vs. DCIT in 237 CTR 408(Bom.). 24. The Departmental Representative on the other hand argued ..... X X X X Extracts X X X X X X X X Extracts X X X X
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