Taurus India Limited, New Delhi V. ACIT, New Delhi

ITA 3815/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1228 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-11-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 07-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONA MOHANTY
• Section: 80IB; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C : NEW DELHI BEFORE SHRI I.P.BANSAL, JM AND SHRI R.C.SHARMA, AM ITA NO.3815/DEL/2009 ASSESSMENT YEAR : 2006-07 M/S TAURUS INDIA LIMITED, B-54, MAYAPURI INDUSTRIAL AREA, PHASE-I, NEW DELHI 110 064. PAN NO.AABCT9680M. VS. ASSTT.COMMISSIONER OF INCOME TAX, CIRCLE-16(1), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJESH JAIN, CA. RESPONDENT BY : SMT.MONA MOHANTY, DR. ORDER PER R.C.SHARMA, AM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 7.7.2009 FOR THE AY 2006-07. 2. THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO RE STRICTING DEDUCTION U/S 10B ON ACCOUNT OF INCOME DERIVED FROM SCRAP SALE. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSIN ESS OF MANUFACTURING OF GARDENING AND FANCY TOOLS, WELDING ACCESSORIES, MAC HINERY TOOLS, AGRICULTURE IMPLEMENTS, GRILLS & GATES ETC. DURING THE YEAR UN DER CONSIDERATION, THE ASSESSEE COMPANY CLAIMED DEDUCTION U/S 10B OF THE ACT IN RES PECT OF ONE OF ITS EXPORT ORIENTED UNIT AT BHIWADI AFTER INCLUDING THE SALE O F SCRAP AMOUNTING TO RS.5,86,443/-. THE ACIT HELD THAT THE SALE OF SCRA P HAS NO NEXUS WITH THE EXPORT ACTIVITIES OF THE UNDERTAKING AND THEREFORE SALE OF SCRAP IS NOT ELIGIBLE FOR DEDUCTION U/S 10B OF THE ACT. ITA-3815/D/2009 2 4. BY THE IMPUGNED ORDER, THE CIT(A) CONFIRMED THE ACTION OF THE AO AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOU ND FROM THE RECORD THAT GENERATION AND DISPOSAL OF SCRAP WAS INTEGRAL PART OF MANUFACTURING ACTIVITIES UNDERTAKEN BY THE ASSESSEE, THEREFORE SAME CONSTITU TED PROFIT DERIVED FROM SALE OF INDUSTRIAL UNDERTAKING. THE SCRAP SO GENERATED WAS OUT OF MANUFACTURING PROCESS ONLY, THE INCOME DERIVED FROM SALE OF SUCH SCRAP CA NNOT BE SAID TO BE INCOME IN THE NATURE OF INCENTIVES OR ANY DUTY DRAWBACK ETC. RECEIVED FROM OUTSIDE AGENCY. THE DECISION OF HON'BLE SUPREME COURT IN THE CASE O F LIBERTY INDIA, WHICH DISENTITLES THE ASSESSEE FROM CLAIM OF DEDUCTION U/ S 10B WITH REGARD TO INCENTIVES RECEIVED IN THE FORM OF DEPB/DUTY DRAWBACK IS NOT A PPLICABLE IN RESPECT OF INCOME RECEIVED OUT OF GENERATION AND SALE OF SCRAP DURING MANUFACTURING PROCESS UNDERTAKEN BY THE ASSESSEE. ACCORDINGLY, WE DIRECT THE AO TO ALLOW CLAIM OF DEDUCTION U/S 80IB IN RESPECT OF INCOME DERIVED FRO M GENERATION OF SCRAP. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON 5 TH NOVEMBER, 2009. SD/- SD/- (I.P.BANSAL) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 05.11.2009. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR ITA-3815/D/2009 3