2016 (7) TMI 1050

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....al services receipts of Rs. 42,20,330/- which was treated by assessee itself as income from other sources. (ii) Whether on the facts and in the circumstances of the case and in law the ld.CIT (Appeals) has erred in allowing deduction u/s 80IE of the I.T. Act, in respect of foreign currency fluctuation again of Rs. 22,41,619/- (iii) Whether on the facts and in the circumstances of the case and in law the ld.CIT (Appeals) has erred in allowing deduction u/s 80IE of the I.T. Act, in respect of income of Rs. 63,899/- earned by way of excess provision written back. 2. Briefly stated the facts of the case are that case of the assessee was picked up for scrutiny assessment and the assessment under section 143(3) of the IT Act, 1961 (hereinafter....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... manufacturing unit. Therefore, the same are eligible for deduction. The ld. Counsel drew our attention to the Bill raised by the assessee company which is enclosed at page 5 of the paper book. 3.3. We have heard rival contentions, perused the material on record and gone through the orders of the authorities below. The ld. CIT (A) has given finding of fact in para 3.1.2. of his order as under :- "3.1.2. I have duly considered AO's contention and appellant's submission, perused the materials on record, duly considered factual matrix of the case as also applicable legal position. Since the technique of steel liners and steel radial gates has been developed in this unit, therefore, when such material was required at another project sites of ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....20,300/- with regard sale of liner to different units of Om Projects as they are very much part of manufacturing process done at the Kemang unit. Addition made of Rs. 42,20,300/- gets deleted." There is no dispute with regard to the fact that the bill was raised in respect of fabrication, manufacturing and fixing the steel liners apart from supervision, technical consultancy, post verification of steel liners. The contention of the ld. Counsel for the assessee is that all these have been related to manufacturing and cannot be taken into isolation. 3.4. We have given our thoughtful consideration to the rival submissions. Undisputedly, there is no dispute that amount relates to manufacturing of eligible article or thing. The revenue has not....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....materials on record, duly considered factual matrix of the case as also applicable legal position. Assessee is a JV concern, which sources its raw materials locally and also imports a substantial part from international market. For imported raw materials, payments are being made in foreign currencies, which are quite volatile, there is no dispute in this regard. The foreign currency gain is the part of raw material as assessee contends that raw materials have been booked by less amount of Rs. 22,41,619/- there is nothing wrong in this claim. Assessee is entitled for deduction u/s 80IE of the Act, on this also. In view of these facts and circumstances as discussed above, AO is directed to allow deduction u/s 80IE in this regard and also to....