TaxTMI 
TaxTMI 
2016 (5) TMI 1405
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....tion 80IB of the Act. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in rejecting the claim of the Appellant for the deduction under Section 80IB of the Act on its Special Cut Naptha (SCN) plant and C3C4 plant, on the ground that the separate working of profit of the plants were not furnished by the appellants. 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in rejecting the claim of the Appellant for deduction of expenditure made towards Long Term Settlement Arrears relating to clerical staff/workers. 4. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in rejecting the contention of the appellant that no expenditure has been incurred for earning the exempt income". 2. At the outset the Ld. Senior Counsel, Shri J D Mistry, submitted that ground No.3 and 4 are not pressed and accordingly same are dismissed as not pressed. 3. On the issue raised in ground No.1, Mr. J D Mistry submitted that this precise matter is covered by the decision of Hon'ble Bombay High Court in the case of Bharat Petroleum Corporation Ltd. (BPCL) and also in the case of Hindustan P....
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....10 in the matter of Bharat Petroleum Corporation Ltd vs State of Gujarat wherein it was held that bottling of LPG Gas amounts to manufacturing activity. 3) The grievance of the revenue is that the aforesaid activity would not amount to manufacturing/production activity and for that purpose reliance is placed on the judgment of the Gujarat High Court dated 20/1/1993 in the matter of State of Gujarat v. Kosan Gas Co. (Sales Tax Matter) where activity of bottling the gas was not considered as manufacturing activity under the Gujarat Sales Tax Act, 1969. 4) Since the Tribunal in the impugned order has relied upon the decision of this Court and the consequent order of the Electricity Ombudsman to hold that the activity of bottling LPG is a very specialized process and the same is considered to be an activity of manufacture. The Tribunal in the impugned order had observed to the effect that the word used in Section 80HH, 80I/80IA of the Act is manufacturing or production. Therefore, every activity which bring into existence a new product would constitute production. The impugned order records a finding of fact that the process of bottling the LPG Gas into cylinder makes the same mark....
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.... order records a finding of fact that the process of bottling the LPG Gas into cylinder makes the same marketable on execution of the process. It therefore follows that a new product comes into existence." For giving the above finding this Court also relied upon the decision of this Court in Writ Petition No.9455 of 2011 in the matter of M/s.Hindustan Petroleum Corporation Ltd. v. Maharashtra State Electricity Distribution Co. Ltd. and Ors and also a decision dated 6 May 2010 of the Gujarat High Court in Bharat Petroleum Corporation Ltd. vs. State of Gujarat & Ors holding that bottling LPG Gas is manufacturing activity. 3. We may also note that the learned counsel for the Revenue does not dispute the questions raised in these appeals are covered by the decision dated 7 March 2013". Thus, in view of the aforesaid binding judicial precedence, we decide this issue in favour of the assessee. Accordingly, we hold that assessee is entitled for claim of deduction under section 80IB in respect of LGP bottling Plants. 7. In ground No.2 the assessee has raised disallowance of claim of deduction under section 80IB of Rs. 17,31,82,180/- (16,57,09,930 + 74,72,250). The said deduction was ....
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....g separate account for claiming deduction under section 80IB. They have stated that a profit from SCN Plant have been worked on the import parity principle in respect of raw material/field cost, refinery overheads and realization on sales based on actual". However, the Ld. AO denied the assessee's claim mainly on the ground that, assessee had failed to furnish the working of separate profit of the industrial undertaking and that the deduction was claimed on the basis of pro-rata rate of the profits of the units worked out in proportion of the capital employed in such units to the capital of the assessee. The AO held that, such a profit of the industrial unit has not been correctly computed. The Ld. CIT(A) too has upheld the action of the AO that a profit from SCN Plant C3 & C4 is in accordance with the provisions of the law. 8. Before us, Ld. Senior Counsel, Mr. J D Mistry, submitted that, right from assessment years 1992-93 upto assessment year 1997-98, the amount of deduction under section 80IA claimed by the assessee has been allowed. However, post AY 1998-99, the Government of India partially deregulated the Oil Sector and under the 'New Regulation Pricing Mechanism' for the ....