M/s Sonalac Paints and Coatings Ltd., Chandigarh V. ITO, Chandigarh

CO 24/CHANDI/2010

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6755 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-12-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 10-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Keywords: Business income; Revised return
• Section: 143(3); 10AA; 80IB; 10B; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 539/CHD/2010 ASSESSMENT YEAR . 2006-07 ITO, WARD-1(2), V M/S SONALAC PAINTS & CHANDIGARH. COATINGS LTD., CHANDIGARH. PAN: AAICS-4995D & CO 24/CHD/2010 IN ITA NO. 539/CHD/2010 M/S SONALAC PAINTS & V ITO, WARD 1(2), COATINGS LTD., CHANDIGARH. CHANDIGARH. (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI N.K.SAINI ASSESSEE BY : SHRI PARIKSHIT AGGARWAL DATE OF HEARING : 26.12.2011 DATE OF PRONOUNCEMENT : 29.12.2011 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL FILED BY THE REVENUE AND THE CRO SS OBJECTIONS BY THE ASSESSEE HAVE BEEN FILED AGAINST THE ORDER DATED, 03.02.2010, PASSED BY THE LD. CIT(A), FOR TH E ASSESSMENT YEAR 2006-07. 2. IN APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUND OF APPEAL: 1. THE LD. CIT(A) HAS ERRED IN LAW ALLOWING ASSESS EE'S CLAIM FOR DEDUCTION U/S 80IB WHICH THE ASSESSEE HAD NOT CLAIMED IN THE RETURN OF INCOME. 2 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN ALLOWING THE DEDUCTION U/S 80IB AS THE CASE LAW RELIED UPON BY HER IS NOT SQUARELY APPLICA BLE TO THE FACTS OF THE PRESENT CASE. 3. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE CANCELLED AND THAT OF THE AO BE RESTORED. 4. THE APPELLANT CARVES TO ADD OR AMEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR DISPOSED OF . 3. THE GROUNDS OF CROSS OBJECTION RAISED BY THE ASS ESSEE VIDE CO/24/CHD/2010 IN ITA NO. 539/CHD/2010 FOR THE ASSESSMENT YEAR 2006-07 ARE REPRODUCED HEREUNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE WORTHY CIT(A) IN APPEALNO.276/P/08-09 DATED 03.02.2010 HAS ERRED IN PASSING THAT ORDER IN CONTRAVENTION OF THE PROVISIONS OF SECTION 250(6) OF THE INCOME-TAX ACT,1961 TO THE EXTENT OF NOT ALLOWING THE GROUND O N CLAIM OF DEDUCTION U/S 80IB ON MISC. BUSINESS INCOME. 2. THAT THE WORTHY CIT(A) HAS ERRED IN CONFIRMING AN ADDITION OF RS.3,31,572/- MADE BY LD. AO BY DISALLOWING CLAIM OF DEDUCTION U/S 80IB ON MISC. BUSINESS INCOME, THE BREAK-UP WHEREOF IS AS UNDER: 2.1 SALE OF EMPTY DRUMS/CONTAINERS RS.2,30,766. 00 2.2 INSURANCE CLAIM FOR STOCK LOSS RS. 79,626. 00 2.3 RECOVERY FROM TRANSPORTER FOR RS. 20,000.0 0 STOCK LOSS 2.4 OTHER PETTY INCOMES RS. 1,180.00 TOTAL RS.3,31,572.00 3. THAT THE RESPONDENT DOES NOT AGREE WITH THE GROUNDS OF APPEAL RAISED BY THE APPELLANT AND THE ORDER OF WORTHY CIT(A), IN RELATION THERETO, MAY BE SUSTAINE D. 3 4. THAT THE RESPONDENT CRAVES LEAVE FOR ANY ADDITION, DELETION OR AMENDMENT IN THE GROUNDS OF CROSS- OBJECTIONS ON OR BEFORE THE SAME IS HEARD OR DISPOS ED OF. 4. LD. 'DR' CONTENDED THAT THE ASSESSEE HAS NOT CLA IMED DEDUCTION U/S 80IB OF THE ACT, IN THE RETURN OF INC OME, HENCE, NO DEDUCTION CAN BE ALLOWED TO HIM WHICH HAS NOT BE EN CLAIMED IN THE RETURN OF INCOME FILED BY THE ASSESS EE. LD. 'DR' REFERRED TO THE PROVISIONS OF SECTION 80A SUB-CLAUS E (5), INTRODUCED BY FINANCE ACT, 2009 W.E.F. 1.4.2003 WHI CH READS AS UNDER : 80A(5) WHERE THE ASSESSEE FAILS TO MAKE THE CLAIM IN HIS RETURN OF INCOME FOR ANY DEDUCTION U/S 10A OR 10AA OR SECTION 10B OR SECTION 10BA OR UNDER ANY PROVISIONS OF THIS CHAPTER UNDER THE HEAD C-DEDUCTIONS IN RESPECT OF CERTAIN INCOMES, NO DEDUCTION SHALL BE ALLOWED TO HIM THEREUNDER. 4.1 LD. 'DR' VEHEMENTLY CONTENDED AND ARGUED THAT THE DECISION IN THE CASE OF CIT V REMCO INTERNATIONAL ( 2009) 221 CTR (P&H) 491 RENDERED ON 08.12.2008 IS NOT APPLICA BLE TO THE FACTS OF THE PRESENT CASE, AS THE SAME WAS REND ERED BEFORE THE INSERTION OF SECTION 80A(5) OF THE ACT, BY THE FINANCE ACT, 2009 W.E.F. 01.04.2003. THE SPECIFIC PROVISIONS OF SECTION 80A(5) OF THE ACT WERE NOT CONSIDERED BY THE HON'BLE HIGH COURT. FURTHER, THE ASSESSEE ITSELF AD MITTED THAT THE IMPUGNED CLAIM WAS NOT MADE IN THE RETURN DUE T O CLERICAL MISTAKE. CONSEQUENTLY, WITH RESPECT IT WA S CONTENDED THAT THE DECISION IS NOT APPLICABLE TO TH E FACTS OF 4 THE PRESENT CASE. IT WAS FURTHER CONTENDED BY THE LD. 'DR' THAT THE ISSUE IS COVERED IN FAVOUR OF THE REVENUE BY THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F GOETZE (INDIA) LTD. V CIT (2006) 284 ITR 323 (S.C). 5. ON THE OTHER HAND, LD. 'AR' PLEADED THAT THE RET URN OF INCOME WAS FILED BY E-MAIL AND THERE WAS SOME ERROR IN SOFTWARE OF THE DEPARTMENT WHICH DEPICTS NIL CLAI M MADE BY THE ASSESSEE U/S 80IB OF THE ACT. HE REFERRED TO P AGES 31 TO 37 OF THE PAPER BOOK AND INDICATED THAT IN FORM NO. 10CCB, THE DEDUCTION U/S 80IB HAS BEEN DULY CLAIMED. HOWE VER, A PERUSAL OF PAGE 17 OF THE PAPER BOOK FILED BY THE A SSESSEE REVEALS THAT DEDUCTION UNDER CHAPTER VIA (SCHEDULE 10) HAS BEEN SHOWN, AS NIL. 6. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS, FACTS OF THE CASE AND THE RELEVANT RECORDS AND THE ORDERS PASSED BY THE LOWER AUTHORITIES. THE AO, IN THE ASSESSMENT O RDER, DATED 17.12.2008 PASSED U/S 143(3) OF THE ACT RECOR DED SPECIFIC FINDING THAT THE ASSESSEE HAD NOT CLAIMED ANY DEDUCTION U/S 80IB OF THE ACT, IN THE RETURN OF INC OME AND HENCE, THE ASSESSEE IS LIABLE TO PAY TAX ON THE ENT IRE INCOME AND THE PROVISIONS OF SECTION 80IB ARE NOT APPLICAB LE. THE RELEVANT FINDINGS OF THE AO ARE REPRODUCED HEREUNDE R, AS CONTAINED IN PARA 3 OF THE ORDER : DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, T HE COUNSEL OF THE ASSESSEE SUBMITTED THAT THE UNIT IS ELIGIBLE FOR DEDUCTION U/S 80IB OF THE IT ACT AND THE ENTIRE INCOME OF THE UNIT WAS EXEMPT UNDER SECTION 80IB OF THE IN COME- TAX ACT. HOWEVER, THE PERUSAL OF THE IT RETURN SHOW S THAT 5 THE ASSESSEE HAS NOT CLAIMED ANY DEDUCTION U/S 80IB OF THE IT ACT. THE RETURN OF INCOME WAS RECEIVED BY T HE DEPARTMENT VIDE ACKNOWLEDGEMENT NO.16200384 DATED 30.11.2006 AND IT WAS NOTICED THAT ON THE FIRST PAG E OF THE RETURN OF INCOME, THE GROSS TOTAL INCOME DEDUC TION UNDER CHAPTER VI-A, NIL HAS BEEN WRITTEN. FURTHER , IN SCHEDULE-10 DEDUCTION UNDER CHAPTER VIA SECTION 8 0G TO SECTION 80LA WERE WRITTEN AND AGAINST SECTION 80IB, NIL WAS WRITTEN. HOWEVER, THE ASSESSEE HAS COMPUTED TAX AS PER THE PROVISIONS OF MAT AND PAID TAX ACCORDINGLY. BUT WHAT IS THE BASIS OF CALCULATION THE TAX AS PER MAT WAS NOT MENTIONED BY THE ASSESSEE. SINCE THE ASSESSEE H AS NOT CLAIMED ANY DEDUCTION U/S 80IB OF THE IT ACT, T HE ASSESSEE IS LIABLE TO PAY TAX ON THE ENTIRE INCOME AND THE PROVISIONS OF SECTION 80IB ARE NOT APPLICABLE. THE ASSESSEE IS REQUIRED TO PAY THE ENTIRE TAX ON THE R ETURNED INCOME. 7. LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE U/S 80IB OF THE ACT, AS IS EVIDENT FROM THE RELEVANT PART OF TH E SAID ORDER, REPRODUCED HEREUNDER : 8. I HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS AND THE LEGAL POSITION AS ENUNCIATED IN VARIOUS JUDGEME NTS OF HON'BLE COURTS AS WELL AS BOARD CIRCULARS. I AM OF THE VIEW THAT THERE IS AMPLE FORCE IN ASSESSEE'S CONTEN TION. MY OBSERVATIONS ON THIS ISSUE ARE AS UNDER : THE RELEVANT DOCUMENTS ON RECORD ESTABLISH THE STAND OF THE LD. COUNSEL AND VARIOUS DECISIONS OF HON'BLE COURTS (SUPRA) FURTHER LEND SUPPORT TO THAT . I HAVE COME ACROSS OTHER SUCH CASES AS WELL, WHERE THERE HAS BEEN AN ERROR SIMPLY BECAUSE OF TECHNICALITY INVOLVED IN E-FILING WHICH WAS A NEW CONCEPT IN THE YEAR UNDER CONSIDERATION. 6 THE VERY FACT THAT AUDIT REPORT IN FORM 10CCB HAS BEEN FILED AND IN COL.30 OF THAT FORM, DEDUCTION U/ S 80IB HAS BEEN CLEARLY MENTIONED LENDS CREDENCE TO ASSESSEE'S CONTENTION. AUDIT REPORT IN FORM NO.3CD IS ANOTHER EVIDENCE TO SHOW THAT THE CLAIM WAS MADE AS INTENDED. IN THE ASSESSMENT YEAR 2005-06, CLAIM WAS ALLOWED TO THE ASSESSEE VIDE ORDER U/S 143(3). 9. FURTHER THE CASE OF JURISDICTIONAL HIGH COURT IS IDENTICAL ON FACTS (17 DTR 214 (P&H) (SUPRA). THE SUBSTANTIAL QUESTIONS OF LAW HERE WERE : 1. WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE TRIBUNAL WAS RIGHT IN LAW IN ALLOWING ASSESSEE'S CLAIM FOR DEDUCTION UNDER S. 80IB WHICH THE ASSESSEE HAD NEITHER CLAIMED IN THE RETURN OF INCOME NOR THROUGH A REVISED RETURN OF INCOME? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE DECISION OF TRIBUNAL IS NOT CONTRARY TO T HE LAW AS SPELT OUT BY THE HON'BLE SUPREME COURT IN GOETZE (INDIA) LTD. V CIT (2006) 204 CTR (S.C) 182 (2006) 284 ITR 323 (S.C) AND ADDL.CIT V GURJARGRAVURES (P) LTD. 1978 CTR (S.C) 1 (1978) 111 ITR 1 (S.C) ? 10. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE ABOVESAID CASE OBSERVED AND HELD AS UNDER : 2. THE ASSESSEE CLAIMED DEDUCTION UNDER S.80IB OF THE ACT AND THOUGH FORM NO.10CCB AND OTHER REQUISITE DOCUMENTS WERE FURNISHED, THE AO WITHOUT REFERRING TO THE SAID DOCUMENTS MADE ASSESSMENT. ON APPEAL, THE APPELLATE AUTHORITY UPHELD THE CLAIM OF THE ASSESSEE. THE TRIBUNAL HAS UPHELD THE SAID VIEW. 3. LD. COUNSEL FOR THE REVENUE SUBMITS THAT THE ASSESSEE MADE CLAIM BY WAY OF AN APPLICATION 7 WITHOUT FILING A REVISED RETURN AND IN SUCH A SITUATION JUDGMENT OF THE HON'BLE SUPREME COURT IN GOETZE (INDIA) LTD. V CIT (2006) 204 CTR (S.C) 182 : (2006) 284 ITR 323 (S.C) WAS APPLICABLE AND DEDUCTION COULD NOT BE ALLOWED. 4. WE ARE UNABLE TO ACCEPT THE SUBMISSION. THE TRIBUNAL HAS CONSIDERED THIS ISSUE AND FOUND THAT AS PER FORM 10CCB FILED DURING ASSESSMENT PROCEEDINGS, THE CLAIM OF THE ASSESSEE WAS ADMISSIBLE. FINDING OF THE TRIBUNAL IS AS UNDER : 19. IN VIEW OF THE ABOVE, WE FIND NO ERROR IN THE ORDER OF THE LD. CIT(A). IT HAS CORRECTLY BEEN HELD BY THE FIRST APPELLATE AUTHORITY, INTER ALIA THAT AS P ER FORM NO.10CCB FILED DURING THE ASSESSMENT PROCEEDINGS, THE CLAIM MADE BY THE ASSESSEE WAS ADMISSIBLE AND THE SAME REMAINED TO BE ALLOWED. THE ORDER OF THE LD. CIT(A) IS HEREBY UPHELD IN VIE W OF THE ABOVE DISCUSSION. THE GRIEVANCE OF THE DEPARTMENT STANDS REJECTED. 5. IN VIEW OF THE FINDING THAT THE ASSESSEE WAS NOT MAKING ANY FRESH CLAIM AND HAD DULY FURNISHED THE DOCUMENTS AND SUBMITTED FORM FOR CLAIM UNDER S. 80IB, THERE WAS NO REQUIREMENT FOR FILING ANY REVISED RETURN. THE JUDGMENT RELIED UPON WAS NOT APPLICABLE. 11. IN VIEW OF THE ABOVE DISCUSSION AND RESPECTFULL Y FOLLOWING THE ABOVE QUOTED DECISION OF HON'BLE PUNJ AB & HARYANA HIGH COURT THIS GROUND OF THE ASSESSEE IS ALLOWED. 8. IN THE COURSE OF APPELLATE PROCEEDINGS BEFORE TH E BENCH, IT TRANSPIRED THAT THE ASSESSEE HAS SUBMITTED BEFOR E THE AO VIDE LETTER DATED 15.12.2008 THAT THE CLAIM OF DEDU CTION U/S 80IB WAS NOT MADE IN THE RETURN OF INCOME DUE TO CL ERICAL MISTAKE AND BY MISTAKE, AMOUNT WAS FILLED AS NIL AGAINST 8 THE CLAIM OF DEDUCTION U/S 80IB. THE RELEVANT PART OF THE SUBMISSION IS REPRODUCED HEREUNDER : 1. SIR, WE HAVE GONE THROUGH THE INCOME TAX RETURN FOR THE YEAR IN QUESTION AS WELL AS OTHER NECESSARY REC ORDS. IT IS SUBMITTED THAT NON CLAIM OF DEDUCTION U/S 80IB I N THE RETURN OF INCOME WAS A CLERICAL MISTAKE AND BY MIST AKE AMOUNT WAS FILLED AS NIL AGAINST THE COLUMN OF DEDU CTION U/S 80IB. IN FACT, THE DEDUCTION HAS BEEN CORRECTLY CLAIMED IN THE COMPUTATION CHART OF INCOME WHICH IS ALREADY ON RECORD OF YOUR GOODSELF. A COPY OF THE SAME IS ENCL OSED HEREWITH ALSO. 8(1) A BARE PERUSAL OF THE SUBMISSION FILED BY THE ASSESSEE BEFORE THE AO, DEMONSTRATES THAT THE CLAIM OF DEDUC TION U/S 80IB OF THE ACT HAS NOT BEEN MADE DUE TO CLERICAL M ISTAKE. IT IS ADMITTED BY THE ASSESSEE ITSELF THAT NON-FILING OF THE CLAIM U/S 80IB OF THE ACT IS ATTRIBUTED TO CLERICAL MISTAKE. FURTHER, A BARE PERUSAL OF THE PROVISION OF SECTION 80A(5) OF THE ACT REPRODUCED ABOVE, CLEARLY MANDATES THAT NO CLAIM UNDER CHAPTER VIA UNDER THE HEAD C-DEDUCTIONS IN RESPE CT OF CERTAIN INCOMES SHALL BE ALLOWED WHERE THE ASSESSE E FAILS TO MAKE THE CLAIM IN HIS RETURN OF INCOME. THE PRO VISIONS OF SECTION 80A(5) ARE MANDATORY IN CHARACTER. THEREFORE, AS CONTENDED BY THE LD. 'DR', IT IS RESPECTFULLY SUBMI TTED THAT THE DECISION RELIED UPON BY THE ASSESSEE, IN THE CASE O F CIT V REMCO INTERNATIONAL (2009) 17 DTR 214, IS NOT APPLI CABLE TO THE FACTS OF THE PRESENT CASE, BEING FACTUALLY DIFF ERENT AND DISTINGUISHABLE. FURTHER, THE HON'BLE HIGH COURT R ENDERED THE DECISION, ON 8.12.2008, BEFORE THE PROVISIONS OF SE CTION 80A(5) WERE INSERTED VIDE FINANCE ACT 2009 W.E.F. 1.4.2003 . FURTHER, THE ISSUE IN QUESTION IS COVERED IN FAVOUR OF THE R EVENUE BY THE 9 DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F GOETZE (INDIA) LTD. (SUPRA). THE RELEVANT PORTION OF REPR ODUCED HEREUNDER : DEDUCTION-RETURN-DEDUCTION CLAIMED AFTER RETURN FI LED- NO POWER IN ASSESSING AUTHORITY TO ENTERTAIN CLAIM MADE OTHERWISE THAN BY WAY OF REVISED RETURN-INCOME - TAX ACT,1961, SS.139, 254. 9. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO SOUGHT SPECIFIC EXPLANATION FROM THE ASSESSEE, FOR NOT MAK ING THE CLAIM U/S 80IB OF THE ACT, IN THE RELEVANT RETURN O F INCOME FILED FOR THE ASSESSMENT YEAR IN QUESTION. THE ASS ESSEE VIDE LETTER DATED 15.12.2008, EXPLAINED AND ADMITTED THA T AFTER GOING THROUGH RETURN AND RELEVANT RECORD, IT IS SUB MITTED THAT DEDUCTION U/S 80IB OF THE ACT WAS NOT CLAIMED DUE T O CLERICAL MISTAKE AND BY MISTAKE, AMOUNT WAS FILLED AS NIL AG AINST COLUMN OF DEDUCTION U/S 80IB OF THE ACT. IT IS ADD ED THAT IN MAJORITY OF THE PARAGRAPHS OF THE SAID LETTER, THE ASSESSEE REITERATED THAT THE IMPUGNED CLAIM WAS NOT MADE DUE TO CLERICAL MISTAKE. IT WAS SUBMITTED IN PARA 9 OF TH E SAID LETTER BY THE ASSESSEE THAT THE RETURN BE TREATED REVISED OR RECTIFICATION MAY BE CARRIED OUT U/S 154 OF THE ACT . 10. THE HON'BLE ITAT, AMRITSAR BENCH IN THE LATEST DECISION IN THE CASE OF BALKISHAN DHAWAN, HUF PROP. OF M/S BKD ENTERPRISES, AMRITSAR V ITO, WARD-1, 5(1) AMRITSAR IN ITA NO. 235-236/ASR/2011 ASSESSMENT YEAR 2006-07 AND 2007-0 8 VIDE ORDER DATED 16.12.2011, DISALLOWED THE CLAIM O F THE ASSESSEE U/S 80IB OF THE ACT, IN THE CONTEXT OF THE PROVISIONS OF SECTION 80AC; HOLDING SUCH STATUTORY PROVISIONS AS 10 MANDATORY. IN THE CONTEXT OF PRESENT CASE, THE PRO VISIONS OF SECTION 80A(5) ARE ALSO SPECIFIC AND MANDATORY IN C HARACTER. FURTHER, THE DECISION AS RELIED UPON BY THE LD. 'AR ' IN THE CASE OF M/S ELECON PACKET V ITO IN ITA NO. 421/CHD/2001 DATED 17.11.2011 IS NOT APPLICABLE TO THE FACTS OF THE PR ESENT CASE, AS IN THAT CASE THE ASSESSEE FILED REVISED RETURN, IN WHICH THE CLAIM WAS MADE. IN THE PRESENT CASE, NO REVISED RE TURN WAS FILED BY THE ASSESSEE. ON THE CONTRARY, THE ASSESS EE ADMITTED NON-CLAIM OF THE SAID DEDUCTION U/S 80IB OF THE ACT DUE TO CLERICAL MISTAKE ON ITS PART. IT IS SETTLED PROPOS ITION THAT NO INTERPRETATIVE PROCESS CAN BE RESORTED TO WHERE THE LANGUAGE OF THE PROVISION IS SIMPLE, PLAIN AND CLEAR. HENCE, T HE SPECIFIC LEGISLATIVE INTENT ENSHRINED IN SECTION 80A(5) OF T HE ACT DESERVES TO BE GIVEN FULL-EFFECT, IN THE MATTER UND ER REFERENCE. THE CIT(A) FAILED TO APPRECIATE THE CLEAR LEGISLATI VE CONTAINED IN THE PROVISIONS OF SECTION 80A(5) WHILE ADJUDICAT ING THE ISSUE IN QUESTION. 11. IN VIEW OF THE ABOVE LEGAL AND FACTUAL DISCUSSI ONS, WE ARE OF THE CONSIDERED OPINION THAT THE ORDER OF THE CIT (A), CANNOT BE SUSTAINED. HENCE, THE APPEAL OF THE REVENUE IS A LLOWED. 12. IN CROSS OBJECTION NO.24/CHD/2010 FILED BY THE ASSESSEE, THE ASSESSEE CHALLENGED THE DISALLOWANCE OF RS.3,31 ,572/- MADE BY THE AO U/S 80IB OF THE ACT AND UPHELD BY TH E CIT(A), IN RESPECT OF MISCELLANEOUS INCOME EARNED BY THE A SSESSEE. 12(1). THE LD. CIT(A) CLEARLY HELD THAT THE INCOME FROM SALE OF DRUMS, INSURANCE FOR STOCK LOSS AND RECOVERY FRO M TRANSPORTER FOR DAMAGE TO MATERIAL WOULD CONSTITUTE 11 INDEPENDENT SOURCE OF INCOME BEYOND THE FIRST DEGRE E NEXUS BETWEEN THE PROFITS AND THE INDUSTRIAL UNDERTAKING. THE LD. CIT(A) PLACED RELIANCE TO ARRIVE AT SUCH FINDING ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF LIBERTY INDIA V CIT 317 ITR 218 (S.C). WE ARE IN FULL AGREEMENT WI TH THE FINDINGS OF THE LD. CIT(A). HOWEVER, AS THE ASSESSE E IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB IN VIEW OF THE FIND INGS RECORDED IN RESPECT OF GROUND NO.1 & 2 RAISED BY THE REVENUE IN ITS APPEAL, THE CROSS OBJECTIONS TAKEN BY THE ASSESSEE DESERVE TO BE DISMISSED AND HENCE, THE SAME ARE DISMISSED. 14. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED AND CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH DEC.,2011. SD/- SD/- (H.L.KARWA) (MEHAR SINGH) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 29 TH DEC.,2011. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH