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TMI Blog2019 (3) TMI 1542X X X X Extracts X X X X X X X X Extracts X X X X ..... of gains derived from industrial undertaking for the purpose of computing deducting under section 80-IB. Including the constructive export computing deduction u/s 10B - HELD THAT:- CIT(A) has rightly held that there is no independent counter sale by the assessee as the assessee supplied the published material to local shopkeepers who are importers of books, from the foreign publishers as per the instruction of the foreign clients (publishers) of the assessee and the sale was actually made by the assessee to the foreign buyer and only the delivery is made to the Indian importer instead of sending the published material aboard and again bringing it back to avoid two way movements of goods. This claim was also allowed by the Revenue in A.Ys. 2005-06 to 2007-08, therefore, rule of consistency also has to be applied. also see REPLIKA PRESS PRIVATE LIMITED AND ANR VERSUS ASSISTANT COMMISSIONER OF INCOME TAX. CIRCLE 15(1). NEW DELHI [2013 (1) TMI 625 - DELHI HIGH COURT] - Decided against revenue - ITA No. 3487/DEL/2011, ITA No. 3921/DEL/2011 - - - Dated:- 26-3-2019 - Shri R. K. Panda, Accountant Member And Ms Suchitra Kamble, Judicial Member For the Appellant : Sh. K. Sampath ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Summary of Sales is as follows:- Amount (Rs.) a) Physical Export 312480000 ] as per chart C enclosed b) Constructive Export 43665896 ] as per chart C enclosed c) Exchange Fluctuation - 3044122 d) Type Setting Scanning 3441138 ] STP Forms Payment advice received are enclosed Annexure D (A) Export Sales 356542912 e) Domestic Sale 67261236 f) Scrap Sale (wastage) 5334092 (B) Domestic sale 72595328 (A+B) Total Turnover 429138240 However the Assessee company is availing Exemption u/s 10B of the Income Tax Act, 1961 on the following sales:- Export Sale a) Physical Export ₹ 312480000 ] as per chart C enclosed b) Constructive Export ₹ 43665896 ] as per chart C enclosed c) Exchange Fluctua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and parcel of the manufacturing process of the industrial undertaking. These receipts cannot be said to be independent income of the manufacturing activities of the undertakings of the assessee and thus could not be excluded from the profits and gains derived from the industrial undertaking for the purpose of computing deduction under section 80-IB. These were gains derived from industrial undertakings and so entitled for the purposes of computing deduction under section 80-IB. There cannot be any two opinions that manufacturing activity of the type of material being undertaken by the assessee would also generate scrap in the process of manufacturing. The receipts of sale of scrap being part and parcel of the activity and being proximate thereto would also be within the ambit of gains derived from industrial undertaking for the purpose of computing deducting under section 80-IB. Therefore, respectfully following the decision of the Hon ble Delhi High Court in case of Sadhu Forging Ltd. (supra), the ground of appeal No. 2 raised by the assessee on this issue is allowed. 9. As regards Revenue s appeal, the DR submitted that there is sale in India and Indian Agents were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovals and permissions granted by the RBI, Customs, (NEPZ) etc. to the assessee. The Ld. AR further submitted that the Excise Duty has been paid and it s a domestic transaction. Thus, the Ld. AR submitted that the CIT(A) was rightly allowed the claim of the assessee with regards to constructive export as is allowed in the earlier A.Ys. 2005-06 to 2007-08. The Ld. AR relied upon the decision of the Hon'ble Supreme Court in case of J B Bora 197 ITR 271. The Ld. AR further submitted that in fact in assessee s own case for Assessment Year 2005-06, the Hon'ble High Court decided this issue in favour of the assessee. 11. We have heard both the parties and perused the material available on record. The CIT(A) held as under: 7.4 On careful examination of the mater, I find that the claim of the appellant with regard to the constructive export has been allowed by the department in scrutiny assessments made in earlier years, i.e. A.Y. 2005-06 to A.Y. 2007-08. Further, as per the facts relating to constructive export, it is found that in this kind of export, the appellant supplies the published material to local shopkeepers who are importers of books, from the foreign publishers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reply furnished by the assessee, framed the assessment order in which, as we have pointed out above, he made specific references to exports in the domestic tariff area and/or constructive exports. While computing the claim for exemption under Section 10B, the Assessing Officer has included the supply made in the domestic tariff area, both in the main body of the assessment order as also in Annexure-A thereto, which was the calculation of the deductions. Therefore, it is absolutely clear that the Assessing Officer had applied his mind to the very issue which is now sought to be raised under Section 147 of the said Act. That would mean that the present venture of invoking Section 147 is nothing but a mere change of opinion, which is impermissible in law, as is well settled by a long line of decisions. The second point of the petitioner is also well taken that an audit party could not have commented on a point of law and, particularly, on an interpretation of Section 10B of the said Act. 12. Therefore, on both points, the petitioner is liable to succeed. The impugned notice dated 24.02.2009 and all proceedings pursuant thereto, including the order dated 07.12.2009, are quash ..... 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