9911796707
TMI Blog2017 (6) TMI 828X X X X Extracts X X X X X X X X Extracts X X X X ..... s have been brought to our notice by the learned D.R. from the assessment year 2010-11. In view of the same we see no reason to interfere in the order of the learned CIT (Appeals) who has allowed the assessee’s appeal. Addition on account of interest received on FDRs by denying deduction u/s 80IB on the same- Held that:- CIT (Appeals) after giving a categorical finding that out of the total interest credited to the Profit and Loss Account of ₹ 2,20,834/-, the assessee had not claimed deduction under section 80IB of ₹ 1,43,585/-, directed the Assessing Officer to allow deduction under section 80IB as per law after due verification. Therefore the contention of the Ld.DR that the assessee has been allowed deduction u/s 80IB on the balance portion of ₹ 77,249/-, we find is incorrect. At the same time the assessee has misconstrued the findings of the Ld.CIT(Appeals) to mean that the entire issue has been restored to the Assessing Officer to decide as per law, since the Ld.CIT(Appeals) has no powers to set aside a case to the AO, as per the provisions of section 251(1) of the Act, which deal with powers of the CIT(A)’s. But, we may add in the same breath, that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al in nature and thus deleting the addition made by the Assessing Officer by treating the same as revenue and further not eligible for deduction u/s 80IB of the Income Tax Act,1961. 5. Brief facts relevant to the issue are that the assessee had claimed deduction of ₹ 1,65,02,244/- u/s 80IB of the Income Tax Act, 1961 (in short the Act ) on excise duty refund. The Assessing Officer disallowed the claim, holding that it cannot be said to be derived from the business of the assessee, which is a prerequisite for claiming the said deduction, since its source was not from the industrial undertaking of the assessee but the scheme of the Central Government. 6. The matter was carried in appeal before the Ld.CIT(Appeals), where the assessee argued that the Hon'ble Jammu Kashmir High Court in the case of M/s Shree Balaji Alloys Others Vs. CIT in ITA No.2 of 2010 Others dated 31.1.2011 had held that the excise duty refund received by the assessee by virtue of the policy of Government of Jammu Kashmir was a capital receipt and hence not liable to tax in the hands of the assessee. The assessee also pointed out that this decision has been upheld by the Hon'ble Apex Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue is, therefore, dismissed in the above terms. 11. Ground No.3 raised by the Revenue is against the action of the Ld.CIT(Appeals) in deleting the addition of ₹ 11,22,561/- made on account of rebate and discount relating to purchase of material and holding that the assessee is eligible for deduction u/s 80IB on the same. 12. Brief facts relating to the issue are that the assessee had claimed deduction u/s 80IB on rebate and discount amounting to ₹ 11,22,561/-. The Assessing Officer denied the same for the reason that receiving rebate and discount was not the primary business of the assessee and, therefore, there was no direct nexus of the income arising on account of rebate and discount with the business activity of the assessee and thus the assessee was not entitled to claim deduction u/s 80IB of the Act on account of the same. 13. Before the Ld.CIT(Appeals), the assessee contended that rebate and discount has been received by the assessee on purchases made by it in its unit set up in Jammu Kashmir, which was eligible to claim deduction of its profits u/s 80IB, and the assessee had instead of deducting this amount from purchases had shown the same separatel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s In the absence of any explanation offered by the assessee the Assessing Officer disallowed deduction under section 80IB on the interest income and made addition of ₹ 2,20,834/-. 18. Before the learned CIT (Appeals), the assessee contended that out of the total interest credited to the Profit and Loss Account of ₹ 2,20,834/-, ₹ 68,220/- was interest received on FDRs and ₹ 1,52,614/- was interest received from other sources. The assessee submitted that no deduction u/s 80IB had been claimed on ₹ 1,43,585/-. The learned CIT (Appeals) after considering assessee s submissions and after perusing the computation of income found that the assessee had not claimed deduction on interest income of ₹ 1,43,585/-. He, therefore, directed the Assessing Officer to allow deduction as per law after due verification. 19. Before us, the learned D.R. argued that the learned CIT (Appeals) had erred in allowing deduction under section 80IB on the interest amounting to ₹ 77,249/-. 20. The Ld. counsel for the assessee, on the other hand, pointed out that the learned CIT (Appeals) had not allowed the assessee deduction on the interest of ₹ 77,249/- b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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