TaxTMI 
TaxTMI 
2017 (4) TMI 1032
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....he Revenue has preferred the present Tax Appeal with the following proposed questions of law : [A] "Whether on the facts and circumstances of the case and in law, the ITAT was right in holding that : (i) The Industrial Undertaking of the assessee firm at Dadra was not formed by splitting up or reconstruction of the existing business of M/s. Sun Pharmaceutical Industries Limited, the major partner in the assessee-firm ? (ii) The assessee firm is entitled to deduction under Section 80IB of the Income Tax Act on the profit of its industrial undertaking at Dadra for the unexpired period in view of CBDT Circular F. No. 15/5/63-IT (A1) dated 31.12.1963 ? (iii) The undertaking formed by SPIL at Dadra was qualified for....
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.....N Soparkar, learned senior advocate appearing on behalf of the respondent-assessee, the present Tax Appeal is admitted to consider the following Questions of law : [A] "Whether on the facts and circumstances of the case and in law, the ITAT was right in holding that : (i) The Industrial Undertaking of the assessee firm at Dadra was not formed by splitting up or reconstruction of the existing business of M/s. Sun Pharmaceutical Industries Limited, the major partner in the assessee-firm ? (ii) The assessee firm is entitled to deduction under Section 80IB of the Income Tax Act on the profit of its industrial undertaking at Dadra for the unexpired period in view of CBDT Circular F. No. 15/5/63-IT (A1) dated 31.12.1963 ? ....
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....a 27 and 28, the Hon'ble Apex Court has observed and held as under :- "27. A Delhi High Court judgment was also cited before us being CIT v. Dharam Pal Premchand Ltd. [2009]317 ITR 353 (Delhi) from which an SLP preferred in the Supreme Court was dismissed. This judgment also concerned itself with Section 80-IB of the Act, in which it was held that refund of excise duty should not be excluded in arriving at the profit derived from business for the purpose of claiming deduction under Section 80-IB of the Act. 28. It only remains to consider one further argument by Shri Radhakrishnan. He has argued that as the subsidies that are received by the respondent, would be income from other sources referable to Section 56 of the Income Tax A....
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....erned, the present Tax Appeal deserves to be dismissed qua the same in light of the recent CBDT Circular No. 37/2016 [F. No. 279/MISC/ 140/2015/ITJ] dated 2nd November 2016. The said recent Circular No. 37/2016 dated 2nd November 2016 reads thus:- 80-IA OF THE INCOME-TAX ACT, 1961- DEDUCTIONS-PROFITS AND GAINS FROM INFRASTRUCTURE DEVELOPMENT UNDERTAKINGS-CHAPTER VIA DEDUCTIONS ON ENHANCED PROFITS. CIRCULAR NO. 37/2016 [F.NO.279/MISC./140/2015/ITJ] DATED 2.11.2016 "Chapter VI-A of the Income-tax Act, 1961 ("the Act"), provides for deductions in respect of certain incomes. In computing the profits and gains of a business activity, the Assessing Officer may make certain disallowances, such a disallowances pertaining to Sections 32, 40....
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....e profits of the undertaking on which the assessee would be entitled for deduction under section 80-IB of the Act. This view was taken by the court in the following case: * Principal CIT, Kanpur v. Surya Merchants Ltd. [2016] 72 taxmann.com 16(All.) The above views have been attained finality as these judgments of the High Courts of Bombay, Gujarat and Allahabad have been accepted by the Department. 3. In view of the above, the Board has accepted the settled position that the disallowances made under sections 32, 40(a) (ia), 40A(3), 43B, etc. of the Act and other specific disallowances, related to the business activity against which the Chapter VI-A deduction has been claimed, result in enhancement of the profits of the eligible busin....
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....its of the appellant were overstated on account of no expenses being debited for R&D facilities. The appellant has submitted that the reimbursement expenses were made to cover a host of facilities and services that were availed of from SPIL and that the expenses on account R&D for products developed and launched were included in that. I find that the notional disallowance on account of R&D expenses has been made on similar lines as the disallowances made for royalty, management fees and selling and distribution expenses. As discussed above, the said notional disallowances were found untenable by the Tribunal and were deleted in its order dated 12.06.2012. No additional facts have been brought on record to support the notional disallowance o....