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TMI Blog2014 (11) TMI 1088X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 5,72,740/- from sale of scrap and interest income of Rs. 24,768/- on loans to employees. ii) On the facts and the circumstances of the case and in law, the Ld. CIT(Appeals) has erred in holding that the assessee is entitled for depreciation on computer peripherals @ 60% amounting to Rs. 9,86,083/- 2. The facts in relation to the first ground are as follows :- The AO when concluding the scrutiny assessment/s 143(3) of the Act reduced the claim of deduction u/s 10A/10B by excluding income of Rs. 5,72,740/- from the sale of scrap and interest income of Rs. 24,768/- on loans given to the employees. On further appeal CIT(A) allowed the claim of the assessee following the orders of the Tribunal :- i) Wipro Ltd. (2005-TII 17-ITAT-BANG-IN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 168 (Asr)/2010 order dated 10.6.2011). It was further submitted that the DRP in assessee's own case for asstt. Year 2009-10 and asstt. year 2010-11 had directed the AO to include the income received from sale of scrap for the purpose of calculation of deduction u/s 10A/10B of the Act. 5. We have heard rival submissions and perused the material on record. Bangalore Bench of the Tribunal in the case of Wipro Ltd. (supra) considered an identical issue and held income received from the sale of scrap is eligible for deduction u/s 10A of the Act. The relevant finding of the Bangalore Bench of the Tribunal reads as follows :- "4.5 We have gone through the records and the submissions made by both sides. We find that the issue involved in this y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile calculating the profit of the eligible business, the expenses and the income of the same unit are required to be netted out. The expenses and the income are relatable to the same nature. We direct that the computation should be made after netting out the expenditure by reducing the income of the nature in dispute. In other words, though it cannot be held that the income of the nature in dispute is income arising out of the activity of an exportoriented unit, however, the expenses are to be calculated on net of income basis. In the result, the income of the eligible business of a unit as prescribed under section 10A will go up by an amount of Rs. 21,142. The ground is, therefore, accordingly allowed. Therefore, following the said decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 1.4.2001, the present Subsection (4) is substituted in the place of old Subsection (4). No doubt Subsection 10(B) speaks about deduction of such profits and gains as derived from 100% EOU from the export of articles or things or computer software. Therefore, it excludes profit and gains from export of articles. But Subsection (4) explains what is the profit derived from export of articles as mentioned in Subsection (1). The substituted Subsection (4) says that profits derived from export of articles or things or computer software shall be the account which bares to the profits of the business of the undertaking and not the profits and gains from export of articles. Therefore, profits and gains derived from export of articles is different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces to the employees is eligible for deduction u/s 10A/10B of the Act. For the above said reasons we allow ground No. 1 raised by the asessee. 11. In so far as the second ground is concerned the facts in brief are as follows :- The assessee had claimed 60% depreciation on computer peripherials such as printer, scanner, NT server, etc. for the reason it form integral part of the computer and these equipments cannot function on its own. The AO concluded the scrutiny assessment u/s 143(3) of the Act, treating the computer peripherals as part of plant and machinery and depreciation on the said computer peripherial was allowed only @ 15%. Therefore the AO disallowed excess depreciation amounting to Rs. 9,86,083/-. 12. On further appeal the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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