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TMI Blog2016 (7) TMI 832X X X X Extracts X X X X X X X X Extracts X X X X ..... king the claim at the time of filing the return of income. Here in this case, the assessee not only by way of notes in the audited accounts but also before the authorities below have relied upon the decisions wherein similar nature of income were held to be allowable for deduction u/s. 80 IA. Thus, the claim of the assessee was genuinely bona fide at the time of filing the return of income. Not only that, some of the items of “other income” like processing charges, insurance claim there are still decisions which are in favour of the assessee post the judgment of Liberty India Ltd. Thus, it cannot be held that the assessee had made any false claim for which any penalty u/s. 271(1)(c) is warranted. Accordingly, on the facts and circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing charges, cash discount, interest on employee loans, but excludes dividend, interest on investments and rental income, which is allocated on the following basis: Related to the manufacturing unit - allocated in the same proportion as the quantity of formulation of the Topik Unit bears to the quantity of formulation of the entire manufacturing unit for the year. Sector Headquarter other income is allocated to the Topik Unit in the proportion of the turnover of the unit compared to the total turnover of the Crop Protection Segment of the Company." 4. Before the AO, the assessee in response to show cause notice with regard to claim of deduction u/s. 80IB has given following details with respect to "other income" : Particulars Topik U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secondly, these claims were based on certain decisions available as on date of filing of return of income. For the first time the disallowance was confirmed by the Tribunal in A.Y. 2001-02, which was on 05.11.2012. Before the CIT(A) also, the assessee reiterated its explanation and submitted that claim of deduction was based on following judicial precedents: i) CIT vs. India Gelatine & Chemicals Ltd. 275 ITR 284, judgment dated 08.04.2004 ii) ITAT Chandigarh Bench in the case of ITO vs. Kiran Enterprises 92 TTJ 104 iii) ITAT Pune Bench in the case of ACIT vs. Kripa Chemicals Private Ltd. 82 ITD 449 Besides these it was submitted that it was only after the decision of Hon'ble Supreme Court in the case of Liberty India Ltd. vs. CIT 317 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d out to the relevant order of the AO for A.Y. 2004-05 in the penalty proceedings. He also placed strong reliance on the decision of Allahabad High Court in CIT vs. Arvind Footwear Private Ltd, wherein on disallowance of claim u/s. 80IB, on the account of incentive by way of duty drawback, the High Court had held that, no penalty should be levied because the decision of Hon'ble Supreme Court in Liberty India Ltd., came subsequent to the filing of return of income. High Court also referred and relied upon the decision of Supreme Court in the case of Reliance Petroproducts Private Ltd., 322 ITR 158 (SC). Lastly, he submitted that all the particulars were disclosed by the assessee not only in the return of income but also in the audit report, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... audited balance sheet but also in the audit report in Form 10CCB. At the time of making the claim of deduction u/s. 80 IB, the assessee has relied upon certain decisions, which were available at that time in support of the claim of similar nature of income which were held to be derived from industrial undertaking for deduction u/s. 80 IA & 80 IB. Some of such decisions have been relied by the assessee before the CIT(A) and also before us by the learned counsel. At the outset, assessee did have some basis for claiming the deduction on "other income. Further disallowance of deduction on similar income made in the earlier years were upheld by the Hon'ble Tribunal only on 05.11.2012, in wake of Hon'ble Supreme Court decision in the case of CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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