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TMI Blog2016 (8) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the explanation given by the Assessee regarding the generation of scrap and spent solution, we are of the considered opinion that the scrap and spent solution are part of the manufacturing process and the C.I.T.(Appeals) was justified in directing the Assessing Officer to recompute the income/loss exempt under sec. 10B of the Act. - Decided in favour of the assessee. Loss incurred from the Aurangabad unit includible in the EOU - Whether loss cannot be considered as a single undertaking of the assessee along with the EOU at Alathur? - Held that:- On the aspect of treating profit/loss from Aurangabad Unit, to be included in the export oriented unit at Alathur, we are not inclined to accept the contentions of the appellant that the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the loss from Aurangabad unit, as non-EOU unit, on the ground that the plant and machinery of the above stated unit had been transferred and that the said unit lost the eligibility of been classified under the EOU status and thus, completed the assessment. 3. Being aggrieved by the order of the assessing officer, the assessee filed an appeal before the Commissioner of Income Tax (Appeals). The appellate authority, vide order, dated 28.02.2005, deleted the addition made by the assessing officer, under the head other sources , holding that the scrap and spent solution, are part of the manufacturing process and therefore the income derived from the sale of such items should be treated as income derived from 100% EOU only. 4. As regards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r? 6. Though referring to Section 10B of the Act, Mrs.Hema Murali Krishna, learned counsel made submissions that deduction of profits and gains as are derived by a hundred per cent export-oriented undertaking, can be made only from the export of articles or things or computer software for a period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce articles or things or computer software, as the case may be and further contended that such deduction cannot be extended to local sale of waste and scrap, this Court is not inclined to accept the said submissions, for the reason that the words, from the export of articles or things or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity is a well reasoned one. Hence, we uphold the finding of the C.I.T.(Appeals) on this issue. 8. On the second substantial question of law, raised in the instant appeal, the Income-Tax Appellate Tribunal, 'B' Bench, Chennai, at Paragraph 11, has ordered as follows: 11. We have heard both the parties and perused the relevant records available with us. It is observed from the records that as there was no specific finding on this issue, the first appellate authority asked the Assessing Officer to submit a report. After obtaining the report, the same has been forwarded to the Assessee calling for clarification which are discussed in paragraphs 12.1 and 12.2 of the C.I.T.(Appeals) order. Considering the report of the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tus of EOU during March. Hence, the Assessing Officer is not correct in treating the loss from Aurangabad unit as a non-EOU and including the loss from such unit in the total loss computed from non-EOU operations. Accordingly, we uphold the order of the C.I.T.(Appeals) on this issue. 9. In the light of the well considered decision of the Tribunal, on the aspect of treating profit/loss from Aurangabad Unit, to be included in the export oriented unit at Alathur, we are not inclined to accept the contentions of the appellant that the Tribunal has committed an error, in holding that the loss incurred from Aurangabad Unit, to be included in the export oriented unit. The findings of the Tribunal that the Unit at Aurangabad was also an integr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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