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TMI Blog2018 (3) TMI 1580X X X X Extracts X X X X X X X X Extracts X X X X ..... my considered opinion, is not justified. It remains undisputed that by virtue of the processing done on milk by the assessee, the milk gets pasteurized, thereby becoming free of bacteria, and thus, potable and consumable. Obviously, therefore, the quality and nature of the milk gets irreversibly altered by such processing. Thus, in this regard, the assessee is entitled to deduction u/s 80IB of the Act. AO is directed to grant exemption u/s 80IB as claimed by the assessee. Quantification of deduction u/s 80IB - whether such deduction is to be allowed on the amount arrived at before setting off the un-absorbed brought forward depreciation, or after setting off the un-absorbed brought forward depreciation- Held that:- the special deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That on the facts and circumstances of the case and in law, and in any view of the matter the ld. Authorities below have erred in initiating and confirming the proceedings u/s 147 of the Act. 2. That on the facts and circumstances of the case and in law, and in any view of the matter the ld. Authorities below have erred in not allowing the deduction u/s 80IB and upholding the same on the proportionate profit calculated at ₹ 23,30,232/- in respect of sale of liquid milk treating it as not eligible for deduction u/s 80IB of the Act. 3. That on the facts and circumstances of the case and in law, and in any view of the matter the ld. Authorities below have erred in allowing the deduction u/s 80IB of the Act on the gross total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liquid milk on the proportionate profit, calculated at ₹ 23,30,232/-. In this regard, the ld. CIT(A) has held that liquid milk is not a product of the industrial undertaking and the processing of pasteurized milk is not an industrial activity. 7. The assessee contends that it processes milk to make it pasteurized milk, ghee and milk products. This has been the consist and stand of the assessee before the Taxing Authorities also. In fact, in its reply (APB 32) the assessee stated before the AO that: 2. That, the assessee is an Industrial Undertaking eligible for deduction u/s 80IB on the profit derived. The deduction u/s 80 IB has been claimed on the profit derived from processing of milk to manufacture Ghee/ Milk powder and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave perused the assessment order and the written submission of the appellant and find that the appellant had derived profit from sale of liquid milk in addition to the sale of manufactured item i.e. ghee and milk powder. The deduction u/s 80IB is allowable from the profits and gains derived from industrial undertaking. The ld. AR of the appellant has submitted that the A.O has accepted the eligibility of the appellant for deduction u/s 80IB of the Act on the profit derived from sale of manufactured items i.e. ghee and powder but such deduction was disallowed on the sale of processed pasteurized milk, which was processed from raw milk to the stage of standardized milk fit for consumption after carrying out some necessary processing, which ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. In the above, view of the matter, finding that the grievance of the assessee by way of ground no.2 is justified, the same is accepted. The impugned order is reversed and the AO is directed to grant exemption u/s 80IB as claimed by the assessee. 11. So far as regards Ground no.3, the assessee contends that the Authorities below have erred in allowing the deduction u/s 80IB of the Act on the gross total income of ₹ 79,94,031/- reduced by brought forward unabsorbed depreciation of ₹ 29,91,348/- instead of gross total income of ₹ 1,33,15,611/- derived from industrial undertaking during the year under consideration. 12. The Authorities below have allowed deduction to the assessee u/s 80IB on the gross total income as r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction required to be made or allowed under any section related to deductions in respect of certain incomes, which is included in the gross total income of the assessee, shall be computed in accordance with the provisions of this Act. Accordingly, the net profit eligible for deduction u/s 80IB of the Act shall be reduced firstly by the inabsorbed brought forward depreciation and then the remaining amount will be eligible for deduction u/s 80IB of the Act. 17. In this regard, I find that in Plastiblends India Ltd. (supra), the Hon ble Supreme Court has upheld the full Bench decision of the Bombay High Court in the case of Plastiblends India Ltd., vs. ACIT and Others , wherein, the Hon ble Full Bench had, inter alia, held, follow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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