2021 (9) TMI 591

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.... in the circumstances of the case, the Ld CIT(A) has erred in law and on facts in allocating Rs. 10 lacs against earning of sub licensing fee and other corporate income as no basis arriving at this amount has been given and the estimated expenditure figure is excessive and unjustified. 2. On the facts and in the circumstances of the case, the Ld CIT(A) has erred in law and in facts in holding the income of Rs. 5,98,30,263/- on account of deduction u/s 80IC in respect of scrap sales of Rs. 5,98,30,263/- as being generated out of its manufacturing activity. 3. That the grounds of appeal are without prejudice to each other. 4. That the appellant carves leave to add, amend, alter or forgo any ground(s) of appeal eithe....

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....uring cannot be said to have been derived from industrial activities. At the most, it can be incidental to the industry activities. Drawing support from the principles laid down by the Hon'ble Supreme Court in the case of Pandian Chemicals 129 Taxmann.com 539 and Liberty India 183 Taxman 349, the Assessing Officer disallowed the claim of deduction in respect of sale proceeds on scrap sales. 9. The assessee strongly agitated the matter before the ld. CIT(A) and reiterated its claim of deduction u/s 80IC of the Act in respect of scrap sale. 10. After considering the facts and submissions, the ld. CIT(A) was convinced that the assessee has successfully demonstrated that all the items of scrap are generated out of its manufacturing ac....

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....desired by the customers. The cooling of the material at some predetermined rates causes the formation of desired structure within the metal for the desired properties with the aim (i) to improve the mechanical property such as tensile strength, hardness, deductibility, shock resistance, etc. (ii) improve machinability, (iii) increase resistance to heat and corrosion (iv) relieve stresses developed due to hot and cordworking, (v) modify electrical, magnetic & molecular bonding properties, etc. The heat treatment toughens the forged part for being used as automobile ports. The process of heat treatment is absolutely essential for rendering them marketable. Therefore, the activity forging was "manufacturing" within the ambit of Section 8018. ....