2016 (1) TMI 364

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....(A) had erred by holding that the assessee is not eligible for deduction U/s.80IB(4) of the Act to the extent of freight income, which is not derived from the manufacturing activity. ii) The Ld. CIT (A) erred in sustaining the interest charged U/s. 234B & 234C of the Act. 3. The brief facts of the case are that the assessee is a company, engaged in the business of manufacturing, trading and servicing of automobile garage equipments, filed its return of income on 30.09.2010 admitting income of Rs. 3,15,47,240/-. Subsequently, the return was selected for scrutiny and the assessment u/s.143(3) of the Act was completed on 30.11.2012 wherein the ld. Assessing Officer disallowed the sum of Rs. 92,75,813/- by withdrawing the benefit u/s.80-IB(4....

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....of the Act and the same is accepted by the assessee. However, while granting deduction the Ld. CIT (A) had disallowed the income of Rs. 27,66,294/- holding it to be on account of income derived from freight charges. While doing so, the Ld. CIT (A) had relied in the decision of the Apex Court in the case of M/s.Pandian Chemicals Ltd., reported in 262 ITR 278(SC). We are also reminded of the decision of the Apex court in the case of Cambay Electrical supply Co. Ltd., reported in 113 ITR 84 which highlights the distinction between the two expressions "income derived from" and "income attributable to". According to the Hon'ble Apex court the expression "attributable to" has a much wider meaning than the expression"derived from" thereby inte....