2010 (7) TMI 1024

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....uram ORDER Chandra Poojari (Accountant Member) This appeal preferred by the Revenue is directed against the order passed by the CIT(A)-II, Hyderabad dated 18.3.2009 and pertains to the assessment year 2006-07. 2. The main grievance of the assessee is that the CIT(A) ought to have upheld the exclusion of modvat/cenvat receipts for 80IB computation as the same are akin to other inc....

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....s to profits derived from eligible business, it is not the ownership of that business which attracts the incentives: what attracts the incentives u/s 80IA, IB is the generation of profits (operational profits). It is for this reason that parliament has confined deduction of profits derived from eligible business mentioned in sub sections (3) to (11A). Each of the businesses mentioned in sub sectio....

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....uted as if such eligible business is the only source of income of the assessee. Therefore, devices adopted to reduce or inflate the profits of the eligible business have to be rejected in view of the overriding provisions of section 80IA(5). Sec.80I, 80IA and 80IB provide for incentives in the form of deductions which are linked profits and not investment. On analysis of sections 80IA and 80IB it ....

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....ndertaking. Profits derived by way of incentives such as DEPB/Duty drawback cannot be credited against the cost of manufacture of goods debited in the profit and loss account and they do not fall within the expression 'profit derived from industrial undertakings' u/s 80IB. 3. Before us the authorised representative of the assessee tried to distinguish the judgement of the Hon'ble Supreme Court,....