2011 (11) TMI 8

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....king as contemplated in Sec. 80IB(1) ignoring the vital fact that the very source of such income was government policy imposing excise duty at differential rate, say 16% on the purchases of raw materials for the earlier assessment year and 8% on finished goods sold during the current financial year, which can be 'attributed to' industrial undertaking but not 'derived from industrial undertaking." 3. The assessee availed/set off Mod vat credit of excise duty of earlier years amounting to Rs. 1 .93 crores. The Assessing Officer questioned the allow ability of deduction claimed u/s 801B on Mod vat credit. The assessee has submitted before the Assessing Officer that the assessee could not set off/availed the Mod vat credit of the earlier yea....

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....ng off of the excise duty paid on the purchases in the earlier years against the excise duty payable on sale during the year. Thus, the ld AR of the assessee has submitted that the income, in fact, arisen only during the year under consideration when the assessee availed the setting off of credit of the excise duty. He has further submitted that the issue on merit is covered in favour of the assessee by the decision of the Hon'ble Guwahati High Court in the case of Commissioner of Income-tax v. Meghalaya Steels Ltd. reported in 332 ITR 91 as well as the order dated 29th April 2001 of the Delhi Bench of the Tribunal in ITA No. 3303/Del/2010. 5 We have heard the rival contention and carefully perused the relevant material on record. Undisp....

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...., we do not find any merit or substance in the contention of the ld DR. 6.1 On the issue whether this benefit of Mod vat credit is the income derived from the industrial undertaking or not, the Hon'ble Guwahati High Court in the case of Meghalaya Steels Ltd. (supra), has held as under: "In so far as the second question is concerned, the Central excise duty refund claimed by the assessee is on the basis of an exemption notifications issued by the Ministry of Finance (Department of Revenue) being Notification No. 32 of 1999 and Notification No. 33 of 1999 both dated July 8, 1999. In terms of these notifications, a manufacturer is required to first pay the Central excise duty and thereafter claimed a refund on fulfillment of certain cond....