AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (3) TMI 1580
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....the ld. Authorities below have erred in not allowing the deduction u/s 80IB and upholding the same on the proportionate profit calculated at Rs. 23,30,232/- in respect of sale of liquid milk treating it as not eligible for deduction u/s 80IB of the Act. 3. That on the facts and circumstances of the case and in law, and in any view of the matter the ld. Authorities below have erred in allowing the deduction u/s 80IB of the Act on the gross total income of Rs. 79,94,031/- reduced by brought forward unabsorbed depreciation of Rs. 29,91,348/- instead of gross total income of Rs. 1,33,15,611/- derived from industrial undertaking during the year under consideration." 2. Apropos Ground No.1, the ld. Counsel for the assessee has stated ....
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....it pasteurized milk, ghee and milk products. This has been the consist and stand of the assessee before the Taxing Authorities also. In fact, in its reply (APB 32) the assessee stated before the AO that: "2. That, the assessee is an Industrial Undertaking eligible for deduction u/s 80IB on the profit derived. The deduction u/s 80 IB has been claimed on the profit derived from processing of milk to manufacture Ghee/ Milk powder and pasteurized milk. The detail of sale of each item has been given in Sch. 14 of the financial statements. The sale of" pasteurized milk has been shown as liquid milk sale. The assessee has not sold out the milk as it has purchased. It was sold only after processing to make it as pasteurized to make it fit ....
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....trial undertaking. The ld. AR of the appellant has submitted that the A.O has accepted the eligibility of the appellant for deduction u/s 80IB of the Act on the profit derived from sale of manufactured items i.e. ghee and powder but such deduction was disallowed on the sale of processed pasteurized milk, which was processed from raw milk to the stage of standardized milk fit for consumption after carrying out some necessary processing, which has changed the characteristics of the raw milk. I have considered the submission and facts of the case and find that, although the assessee is an industrial undertaking but it has undertaken the activities of sale of liquid milk, which is not the product of industrial undertaking. The process of pasteu....
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....nds that the Authorities below have erred in allowing the deduction u/s 80IB of the Act on the gross total income of Rs. 79,94,031/- reduced by brought forward unabsorbed depreciation of Rs. 29,91,348/- instead of gross total income of Rs. 1,33,15,611/- derived from industrial undertaking during the year under consideration. 12. The Authorities below have allowed deduction to the assessee u/s 80IB on the gross total income as reduced by brought forward un-absorption depreciation. The assessee, in this regard, has relied on 'M/s Oxford Mouldings Pvt.Ltd., vs. DCIT', an order dated 12.10.2012 passed by the Mumbai ITAT for A.Y. 2005-06 in ITA No.4122/Mum/2011. 13. On the other hand, the ld. DR has placed strong reliance on 'Plastiblends ....
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....hall be reduced firstly by the inabsorbed brought forward depreciation and then the remaining amount will be eligible for deduction u/s 80IB of the Act." 17. In this regard, I find that in 'Plastiblends India Ltd.' (supra), the Hon'ble Supreme Court has upheld the full Bench decision of the Bombay High Court in the case of 'Plastiblends India Ltd., vs. ACIT and Others', wherein, the Hon'ble Full Bench had, inter alia, held, following the Supreme Court decisions in the case of 'Distributors' (Baroda) Pvt. Ltd. vs. Union of India', 155 ITR 120 (SC) and 'Liberty India Ltd. vs. CIT', that the special deduction under Chapter VI-A of the IT Act has to be computed on the gross total income determined after deducting all deductions allowable und....