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TMI Blog2011 (2) TMI 1624X X X X Extracts X X X X X X X X Extracts X X X X ..... peals Revenue has raised the following common grounds: I. The learned CIT[A] has erred on facts and in law and in the circumstances of the case to grant the deduction U/sec. 80IB of the IT Act, on the income from sale of empty barrels, interest on delayed payment from debtors and amount written back which is not an Income derived from the Industrial undertaking and therefore, not eligible for deduction u/sec. 80IB of the Act. II. The learned CIT[A] has erred on facts and in law and in the circumstances of the case in allowing the assessee s claim for deduction u/sec. 80IB disregarding the fact that the above assessee s business Income does not synchronise with the term of manufacture referred to in sec. 80IB of the IT Act, 1961. II ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the arguments of the AO. It is seen that an amount of ₹ .16,277/- has been received by the appellant on cash discount [on purchases]. The appellant must have purchased goods from different parties and received cash discount from them. It is, thus quite evident that this discount has been earned from the business of the appellant. The case laws mentioned from Sr. No. 3 to 6 also support the argument of the appellant. I, therefore, hold that the cash discount of ₹ .16,277/- is the income derived from business of industrial undertaking and deduction u/s. 80IB is liable to be granted on this income. So far as the amount written back of ₹ .15,797/- is concerned, the same is also of the similar nature because the appellant has w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cash discount of ₹ .9,46,945/- is the income derived from business of industrial undertaking and deduction u/s. 80IB is liable to be granted on this income. So far as the amount written back of ₹ .21,231/- is concerned, the same is also of the similar nature because the appellant has written back some of the credits which are not payable. Hence it is in the nature of profit from the business of the industrial undertaking. The amount of ₹ .21.231/- will therefore also qualify for deduction u/s. 80IB. 2.6 The appellant has also sold empty barrels which are used in the business for storage of water based polymer emulsion for an amount of ₹ .6,54,410/-. The empty barrels are in the nature of business assets and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, clearly the amounts mentioned by both the authorities are different, which clearly shows that the issue has not been examined properly. 7. We would further like to mention that as far as interest received on delayed payments from the customers is concerned, the same is directly connected with the business of industrial undertaking as observed by the Hon'ble Madras High Court in the case of CIT vs. Madras Motors Ltd. [257 ITR 60), as under: (ii) That if the purchasers of the forgings did not make the payments for the forgings and then agreed to pay interest on the delayed payments, the said interest would be directly relatable to the business of the assessee of forgings. Thus, the interest would have to be inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not clear as to how the ld. CIT[A] has given a finding that the assessee has sold empty barrels which were used for storage of polymer emulsion. Such finding should not have been given in the absence of relevant facts and evidence. If such barrels were part of the purchase of raw material, then only sale of the same would be eligible for deduction because in that case the barrels must have gone into inflating the purchases if they were separately purchased as fixed asset or otherwise and used for many years, then they have nothing to do with the business of industrial undertaking. 9. As far as the amounts written off/discount are concerned, again it has to be seen that whether the amounts have been written off/discount is on account ..... X X X X Extracts X X X X X X X X Extracts X X X X
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