2018 (3) TMI 880

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....order of the Ld. Assessing Officer under section 263 of the Income Tax Act. 3. That the Ld. PCIT(Central) has wrongly passed order under section 263 on the issue already decided by the Assessing Officer in order passed under section 153A(1)(b) r.w.s 143(3) of the Act. 3. Brief facts of the case are that the assessment in the case has been completed under section 153A (1) (b) by the DCIT, Central Circle-2 Chandigarh on 03/03/2014 accepting the returned income. Subsequent to the passing of assessment order the Ld. PCIT, Central Gurgaon has invoked powers conferred by Section 263 and passed an order on 28/03/2016. The order of the Ld. Pr. CIT passed under section 263 of the Income Tax Act, reads as under: A perusal of the ....

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....80 IB. 4. The facts of the case have been considered. The details of other income amounting to Rs. 4,01,69,808/- is as under:  Sr. No Particulars Amount  1 Excise Incentives 4,01,20,670/-  2. Interest on FDR 18,931/-  3. Misc. W/OIT 1,222/-  4. Misc. Income 258,985/-   Total 4,01,69,808/-   05. The Hon'ble Supreme Court in the case of Liberty India Vs. CIT 317 ITR 218 (SC) held, " Continuing our analysis of Sections 80-IA/80-IB it may be mentioned that sub-section (13) of Section 80-IB provides for applicability of the provisions of sub-section (5) and sub-sections (7) to (12) of Section 80-IA, sofa-as may be, applicable to the ....

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.... of cost cutting, cost, rationalization, business restructuring, tax planning on sundry balances being written back, liquidation of current assets etc. Therefore, we are of the view that duty drawback, DEPB benefits, rebates etc. cannot be credited against the cost of manufacture of goods; debited in the Profit & Loss account for purposes of Sections 80-IA/80-IB as such remissions (credits) would constitute independent source of income beyond the fifsCdegree nexus between profits and the industrial undertaking." 6. Following the principle laid down by Hon'ble Supreme Court, the Excise Incentive. Interest on FDR. Miscellaneous write off and other miscellaneous Income are not income "derived from industrial undertaking." ....

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....ly in the case of Green Field Enterprises Vs. Addl. CIT(2016) (5) TMI 929 the coordinate Bench has treated excise incentive as eligible for deduction. 5. Ld. CIT, DR strongly relied on the order of the Ld. Pr. CIT. 6. We have gone through the judgments quoted and also the order of the Pr. CIT. We find that the companies availing the benefit of notification no. 56/2002 CE dt. 14/11/2002 to Central Excise which under a special procedure the manufacturers located in J&K first pay excise duty and cess and there after claim the refund of the same under Central Excise Tariff. Thus it makes an integral part of the profits of the business which would be eligible for deduction under section 80IB. 7. The order of the Pr. CIT holds that the e....