2016 (6) TMI 524

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....s. 60,36,888/- being interest from debtor in calculating deduction u/s 80IB of the Act, without appreciating that the income from interest is not an income directly connected to the industrial operation. 2. In doing so, the Ld. CIT(A) has erred in not appreciating the ratio of the decisions of the Hon'ble Supreme Court in the case of CIT vs Sterling Foods reported in 237 ITR 579 and Pandian Chemicals Ltd. Vs CIT reported in 262 ITR 278." 3. The Assessee is a company engaged in the business of manufacturing of aluminium and zinc based alloys and die-cast components. It is not in dispute that the assessee was entitled for deduction u/s 80IB of the Income Tax Act, 1961 (Act) in respect of profits derived from the business of manufacturing....

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.... the considered view that the deductions of Rs. 10,96,258/- for A.Y. 2000-01, Rs. 27,92,269/- for A.Y. 2001-02 and .29,89,861/- for A.V. 2003-04 made out of the total income to calculate deduction u/s 80lB are not justified and no deduction should be made for calculation of deduction u/s 801B. In other words, deduction should be allowed after adding the interest income which has been deducted from the total income for the purpose of calculation of deduction u/s 80IB. 5. The CIT(A) following the said decision of ITAT allowed the claim of the Assessee, by observing as follows: "Thus, the Hon'ble ITAT held that for the purpose of calculation u/s 801B, the interest received from the trade debtors will not be excluded. In other words, th....