9911796707
TMI Blog2013 (12) TMI 1562X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with the impugned judgment and order dated 02.03.2007 passed by the learned Income Tax Appellate Tribunal (hereinafter referred to as the ITAT ) in ITA No.2816/AHD/2003 for AY 200102, the revenue has preferred the present Tax Appeal to consider the following substantial question of law. Whether on the facts and circumstances of the case and in law was the Appellate Tribunal right in holding that deduction u/s 80IB is allowable from the income from sale of scrap? 2.0. That the assessee filed return of income for AY 200102 declaring total income at ₹ 21,34,149/and agricultural income of ₹ 1,92,558/. That the assessee is manufacturing card board boxes of various sizes and supplies the same to various parties. During ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment and order relying upon the decision of the Division Bench of this Court in the case DCIT vs. Harjivandas Juthabhai Zaveri Anr reported in 258 ITR 785 (Guj), the learned ITAT has dismissed the said appeal confirming the order passed by the learned CIT(A) deleting the disallowance of the deduction under Section 80IB of ₹ 3,20,508/. 2.3. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned ITAT, the revenue has preferred the present Tax Appeal to consider the following the substantial question of law. Whether on the facts and circumstances of the case and in law was the Appellate Tribunal right in holding that deduction u/s 80IB is allowable from the income from sale of scrap? 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee submitted that it would not make any difference if the amount received by the sale of empty barrel or bardan (jute bags) is deducted from the cost of the raw material. He submitted that if the cost is reduced by deducting the sum so received, the profit will increase and ultimately, the total would be the same. He submitted that the Commissioner of Income Tax (Appeals) and the Tribunal has rightly come to the conclusion that the items covered by question No. 5 are covered by section 80.I of the Act inasmuch the amount received can be said to have been received from the activities undertaken by the Assessee. He submitted that no question of law is raised, more particularly, when a Division Bench of this Court in Income Tax Applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was charging them on job work basis or on the basis of labour charges. It would still be qualified as carrying on eligible business under Section 80IB. The activities of the assessee were in giving heat treatment for which it had earned labour charges and job work charges. It could thus be said that the assessee had done a process on the raw material which was nothing but a part and parcel of the manufacturing process of the industrial undertaking. These receipts could not be said to be independent income of the manufacturing activities of the undertaking of the assessee and thus could not be excluded from the profits and gains derived from the industrial undertaking for the purpose of computing deduction under Section 80IB. These were gai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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