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of <h1>Exchange Rate & Scrap Sales Eligible for Deduction: ITAT Affirms CIT (A)'s Decision</h1> <h3>Asstt. Commissioner of Income Tax Versus M/s. Pyramid Plastics</h3> Asstt. Commissioner of Income Tax Versus M/s. Pyramid Plastics - TMI Issues:1. Eligibility of exchange rate difference for section 80IB deduction.2. Eligibility of sundry balances written back for section 80IB deduction.3. Eligibility of income from scrap sales for section 80IB deduction.Issue 1:The first issue revolves around the eligibility of an amount arising from exchange rate difference for section 80IB deduction. The Assessing Officer considered this sum as speculation profits unrelated to the assessee's export business. However, the CIT (A) overturned this decision by citing a relevant court case. The ITAT upheld the CIT (A)'s decision based on the precedent set by the jurisdictional high court in a similar case, emphasizing that foreign exchange fluctuation gains are entitled to section 80IB deduction. The Revenue's appeal on this ground was rejected.Issue 2:The second issue concerns the eligibility of sundry balances written back for section 80IB deduction. The Assessing Officer initially disallowed this amount, arguing that it did not qualify for the deduction under section 80IB. The CIT (A) disagreed with the AO's reasoning, highlighting that the written back amount was related to liabilities arising from certain expenses incurred by the assessee's industrial undertaking. The ITAT concurred with the CIT (A)'s findings, emphasizing that the written back amount was directly linked to the business undertaking and thus eligible for section 80IB deduction. The Revenue's challenge on this ground was dismissed.Issue 3:The final issue pertains to the eligibility of income derived from scrap sales for section 80IB deduction. The Revenue contested the lower appellate order that deemed the income from scrap sales as eligible for section 80IB deduction. However, the ITAT upheld the CIT (A)'s decision based on a precedent set by the jurisdictional high court in a similar case, where identical income was considered eligible for the deduction. As there were no factual discrepancies pointed out by the Revenue, the ITAT affirmed the CIT (A)'s findings, leading to the dismissal of the Revenue's appeal.---
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