2006 (11) TMI 129

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....nst the common order dated January 27, 2006, passed by the Income-tax Appellate Tribunal whereby for the assessment year 1993-94, the assessee's appeal (I. T. A. No.6130/1997) was dismissed and the Revenue's appeal (I. T. A. No. 154/1998) was allowed in part and for the assessment year 1994-95, the Revenue's appeal (I. T. A. No. 5354/1998) was allowed in part. Although the impugned order also allo....

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....e Department of Atomic Energy and in addition thereto receives service charges and production linked incentives. There is no dispute in respect of the so-called "reimbursement of cost". The Commissioner of Income-tax (Appeals) has taken the view that the service charges received by the assessee could not be viewed as profits arising from the assessee's own manufacturing activity. In his opinion, t....

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....of ammonia gas to the heavy water plant. The splitting up of the price into cost of production and service charges is only for convenience and cannot result in the denial to the assessee of the benefit of section 80-I to the extent of such service charges. On a consideration of the facts of the case and the object of section 80-I of the Act, we are unable to accept the assessee's contention. In vi....

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....he assessee itself was engaged in the manufacturing of the items in question and not a third party. However, in the instant case, the Income-tax Appellate Tribunal while reversing the Commissioner of Income-tax (Appeals) on this point, has held that the machinery hire charges received by the assessee "could not be considered as profits derived from its industrial undertaking for the purpose of com....