2016 (10) TMI 1064

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....he circumstances of the case and in law, the ITAT was right in deleting the addition made by A.O. u/s 41(1), being the difference between the net present value of Sales Tax loan liability and actual liability without appreciating that the assessee had enjoyed deduction of the Sales Tax liability in its income tax assessment in earlier years? (ii) Whether on the facts and in the circumstances of the case and in law, the ITAT was right in excluding the deduction u/s 80IB from the profits of the business for determining deduction u/s 80HHC in view of section 80IA(9)? (iii) Whether on the facts and in the circumstances of the case and in law, the ITAT was right in including interest on delayed payments as income of the unit while working ....

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....t in Associated Capsules P.Ltd. (supra), it has not been stayed. Therefore, it continues to be binding upon us. The fact that the Apex Court in Micro Labs Ltd. (supra) has, on account of difference of view between members of its Bench, referred this issue to its Larger Bench, would not by itself reduce the binding character of the decision of this court in Associated Capsules P.Ltd. (supra) and we are bound by it. (d) Therefore, Question (ii), as proposed, does not give rise to any substantial question of law. Thus, not entertained. 5. Regarding Question (iii) : (a) The impugned order of the Tribunal held that the Respondent assessee was eligible to deduction under Section 80IB of the Act in respect of interest received from its cu....

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....and is paid towards the lag which has occurred in the payment of the price of the goods sold by the assessee. On these facts, therefore, the payment of interest on account of the delay in payment of the sale price of the goods supplied by the undertaking partakes of the same nature and character as the sale consideration. The delayed payment charges consequently satisfy, together with the sale price, the first degree test which has been laid down by the Supreme Court in Liberty India. For these reasons, the first question of law, is answered against the Revenue and in favour of the assessee." In the above view, the interest, which has been received along with the sale price, would satisfy the requirements of Section 80IB of the Act as ha....