2013 (12) TMI 1562

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....llowing substantial question of law. "Whether on the facts and circumstances of the case and in law was the Appellate Tribunal right in holding that deduction u/s 80IB is allowable from the income from sale of scrap?" 2.0. That the assessee filed return of income for AY 200102 declaring total income at Rs. 21,34,149/and agricultural income of Rs. 1,92,558/. That the assessee is manufacturing card board boxes of various sizes and supplies the same to various parties. During the year, the appellant had also earned income from sale of scrap to the tune of Rs. 3,20,508/In spite of the said income from sale of scrap the Assessing Officer held that only such profits which are directly derived from the business of Industrial undertaking s....

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....lowance of the deduction under Section 80IB of Rs. 3,20,508/. 2.3. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned ITAT, the revenue has preferred the present Tax Appeal to consider the following the substantial question of law. "Whether on the facts and circumstances of the case and in law was the Appellate Tribunal right in holding that deduction u/s 80IB is allowable from the income from sale of scrap?" 3.0. Heard Shri Sudhir Mehta, learned advocate for the revenue and Shri B.D. Karia, learned advocate appearing for Shri R.K. Patel, learned advocate for the assessee. 4.0. The short question which is posed for consideration of this Court is whether on the facts and circumstances of....

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....timately, the total would be the same. He submitted that the Commissioner of Income Tax (Appeals) and the Tribunal has rightly come to the conclusion that the items covered by question No. 5 are covered by section 80.I of the Act inasmuch the amount received can be said to have been received from the activities undertaken by the Assessee. He submitted that no question of law is raised, more particularly, when a Division Bench of this Court in Income Tax Application No. 70 of 1997 had considered a similar question and held that "it was, however, found that the items of kasar and sale of empty soda ash bardans, as directly connected with the manufacturing activities of the assessee and should be allowed". It is required to be noted that if th....

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.... thus be said that the assessee had done a process on the raw material which was nothing but a part and parcel of the manufacturing process of the industrial undertaking. These receipts could not be said to be independent income of the manufacturing activities of the undertaking of the assessee and thus could not be excluded from the profits and gains derived from the industrial undertaking for the purpose of computing deduction under Section 80IB. These were gains derived from the industrial undertaking and so entitled for the purpose of computing deduction under Section 80IB. There could not be any two opinions that manufacturing activity of the type of material being undertaken by the assessee would also generate scrap in the process ....