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TMI Blog2016 (2) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... d income from sale of scrap and, therefore, in view of our above discussion, we find that the issue of assessee is covered by the decision of Hon’ble Jurisdictional High Court in the case of CIT vs. Jikar A. Saiyed (2013 (12) TMI 1562 - GUJARAT HIGH COURT). The ground raised by the Revenue is dismissed. - Decided in favour of assessee - ITA No. 1078/Ahd/2012 - - - Dated:- 13-1-2016 - Shri Rajpal Yadav, JM, Manish Borad, AM. For The Appellant : Shri Sanjay Agrawal, CIT, DR For The Respondent : Smt. Urvashi Sodhan, AR ORDER PER Manish Borad, Accountant Member. This is an appeal filed by the Revenue against the order of CIT(A), Valsad dated 21.02.2012 in appeal No.CIT(A)/VLS/130/11-12 for Asst. Year 2009-10. Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer was of the view that the sale of scrap was not generated as by-product during the course of manufacturing products, rather it has been earned from sale of old unusable products/material. Income of the assessee was assessed at ₹ 24,39,96,780/-. 3. The assessee being aggrieved, carried the matter in appeal before CIT(A). The CIT(A) after considering the contentions of Assessing Officer in the assessment order and the submissions of assessee accepted the claim of assessee and allowed the same by observing as under :- 5.3 Decision : I have carefully considered the observation of the A.O. in the assessment order and the submissions of the A.R. of the appellant. This issue has been decided by me in favour of the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 011 for Asst. Year 2008-09 and the issue has been decided in favour of assessee vide its order dated 04/09/2015 by observing as under :- 5. Heard both sides. Records perused. The Revenue s only argument is in tune with the Assessing Officer s findings narrated hereinabove that the impugned scrap sales cannot be held to have been derived from asssessee s manufacturing activity as per the tribunal s order in ITA 3096/Ahd/2007 in its own case pertaining to the preceding assessment year. The assessee supports the CIT(A) order under challenge. It is evident to us from the statement of facts at page no. 2 that the co-ordinate whilst deciding the very issue against the assessee had placed reliance upon the decision of D.P. Agrawal vs. CIT 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f empty soda ash bardana, (iii) sale of empty barrels and (iv) sale of plastic waste. The Division Bench has observed and held as under: So far as question No. 5 is concerned, learned counsel Mr. Soparkar drew our attention to section 80.I of the Act and submitted that this section is meant for deduction in respect of profit and gains from industrial undertakings. With regard to the question raised by the Revenue that the amount received on sale of jute bags, barrel etc. ought to have been deducted from the cost of the material, Mr. Soparkar, learned advocate for the assessee 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sale of scrap part and parcel of industrial activity and therefore, deduction under Section 80IB is allowable. In the said decision, the Delhi High Court has held that the industrial undertaking set up by the assessee was for the purpose of manufacture of steel forging, transmission gears and part and accessories of motor vehicles and the scrap of these items was stated to be a by product of manufacturing process. The activity of forging was manufacturing within the ambit of section 80IB. It was immaterial that the assessee was doing the job of forging also for customers and 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 activit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from sale of scrap. Under the circumstances, substantial question of law raised is answered against the revenue. Hence, present appeal deserves to be dismissed and is accordingly dismissed. 7. From going through the above referred judicial pronouncement wherein it has been held that if the main manufacturing activity is eligible for deduction u/s 80IB of the Act then receipt from sale of scrap generated in the process of manufacturing as well as the scrap from other items available in the manufacturing unit, then such receipts from sale of scrap shall come within the ambit of gains eligible for deduction u/s 80 IB of the Act. In the case of assessee the issue is similar as the assessee s business is eligible for deduction u/s 80IB and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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