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TMI Blog2016 (1) TMI 1523X X X X Extracts X X X X X X X X Extracts X X X X ..... salary or leave with wages payable, which has been surrendered by the employees. As far as the Misc. income received as a result of sale of scrap paper, we find that the issue regarding Misc. income derived from sale of scrap stood decided in favour of the assessee in the identical facts of the case in the case of Universal Precision Screws [2015 (10) TMI 951 - DELHI HIGH COURT] after following the decision of Punjab Stainless Steel Industries [2014 (5) TMI 238 - SUPREME COURT] Besides, the scrap paper is an integral part of production which stood exported by the EOUs of assessee. Therefore, we direct the AO to treat the Misc. income received from the sale of scrap as eligible for deduction u/s. 10B of the Act. However, the Misc. income re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omes of Rs. 39,393/- for F-5 Noida Unit. 3.(b). That the Learned Commissioner of Income Tax (Appeals) has gone wrong in calculating the profits derived from export of article or things by reducing Misc. incomes of Rs. 22,970/- for FBD. Digital Sector-16 Unit. 3(c). That the Learned Commissioner of Income Tax (Appeals) has gone wrong in calculating the profits derived from export of article or things by reducing Misc. incomes of Rs. 5,31,107/- towards compensation. 4(a). That the Learned Commissioner of Income Tax (Appeals) has gone wrong in not treating the Misc. Income of Rs. 22,970/- for FBD. Digital Sector-16 Unit earned from export activities. 4(b). That the Learned Commissioner of Income Tax (Appeals) ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT Act Faridabad Digital Unit 54,29,215 47,15,626/- F-5, Noida Unit [after reducing interest income from Head office/Faridabad office] 7,38,81,079/- 7,32,32,608/- The total turnover and export turnover of EOU is as under :- Name of EOU Total Turnover Export Turnover Faridabad Digital Unit 1,67,02,149/- 1,67,02,149/- F-5, Noida Unit [after reducing interest income from Head office/Faridabad office] 15,39,94,868/- 15,39,94,868/- Following are the details of other incomes which are excluded by the AO on the ground that these incomes/receipts are not derived from export oriented undertaking for the export of goods while calculating deduction u/s. 10B of the Act : Faridabad, Digital Unit F-5, Noida Misc. Income 22,97 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where in computing the total income of the undertaking for any assessment year, its profits and gains had not been included by application of the provisions of this section as it stood immediately before its substitution by the Finance Act, 2000, the undertaking shall be entitled to the deduction referred to in this sub-section only for the unexpired period of aforesaid ten consecutive assessment years : Provided further that for the assessment year beginning on the 1st day of April, 2003, the deduction under this sub-section shall be ninety per cent of the profits and gains derived by an undertaking from the export of such articles or things or computer software: Provided also that no deduction under this section shall be allowed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our attention to page 17 of the paper book-2 containing the details of miscellaneous income and compensation from A.Y. 2002-03 to 2007-08. These details show that the assessee has been granted exemption on miscellaneous income and compensation in earlier years 2002- 03 to 2006-07, but the same has been disallowed in the year under consideration. 4. The learned DR on the other hand, relied on the orders of the authorities below. 5. We have heard both the parties and have perused the material available on record. We have also gone through the copy of ledger account of Misc. income at placed at page 7 to 9 of paper book No. 2 relating to F-5 Noida Unit of Rs. 39,993/- which clearly shows that all the amounts received under this he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. However, the Misc. income received by EOUs out of sale of wooden furniture or waste coolers, to our mind, being not integrally connected with the export business, shall not be eligible for deduction u/s. 10B of the Act. Similar is not position with respect to compensation alleged to have been received as a result of unpaid salary or leave with wages, surrendered by the employees, as such receipts could not be established to have any relation with the export business of the assessee undertaking. We, therefore, confirm the order of the ld. CIT (A) on this count. The AO is, therefore, directed to work out the deduction u/s. 10B of the Act accordingly. 6. In the result, the appeal of the assessee is partly allowed. Order pronounced i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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