TaxTMI 
TaxTMI 
2018 (1) TMI 1709
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....come after adjusting the interest expenditure from the profit eligible for deduction under section 80IB of the Act and the same is raised by way of Grounds No. 1 & 2, which read as under:- "(i) That the Ld. CIT(A) has erred in directing the A.O. to net off the interest income credited in the profit and loss account of the eligible undertaking against the interest expense debited in the said profit and loss account without appreciating the facts and circumstances of the case supported by the decision of Hon'ble Supreme Court in the case of Pandian Chemicals Limited Vs. CIT,[2003] 129 TAXMAN 539 (SC) and the decision of High Court of Jammu and Kashmir in the case of Asian Cement Industries Vs Income Tax Appellate Tribunal, [2012] 28 TAXMAN 290(Jammu & Kashmir). (ii) That the Ld. CIT(A) has erred in directing the A.O. to recompute the income of the eligible undertaking and recompute the deduction u/s 80lB after netting off the interest income credited in the profit and loss account of the eligible undertaking against the interest expense debited in the said profit and loss account". 4. The assessee in the present case is a Company, which is engaged in the business of manufa....
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.... interest expenses had a direct nexus and therefore netting of interest income against the interest expenses had to be allowed. Since the interest expenses was much more than the interest income, no interest income can be excluded from the profits on which deduction u/s 80IB(5) of the Act ought to be allowed. We, therefore, uphold the order of CIT(A) on this issue and dismiss ground nos. (iv) and (vi) raised by the revenue". 7. The ld. D.R., on the other hand, has relied on the decision of the Agra Bench of this Tribunal in the case of Spring Merchandisers Pvt. Limited -vs.- ITO (ITA No. 110/Agra/2011 dated 31.08.2012) as well as the decision of the Hon'ble Jammu & Kashmir High Court in the case of Asian Cement Industries -vs.- ITAT (I.T. Appeal No. 5 & 6 of 2007 dated 24.08.2012) in support of the Revenue's case on this issue. 8. We have carefully gone through both these decisions cited by the ld. D.R. It is observed that the case of Spring Merchandisers Pvt. Limited (supra) decided by the Agra Bench of this Tribunal and cited by the ld. D.R. is distinguishable on facts, inasmuch as, the interest income earned on FDRs in the said case was held to be chargeable to tax under....
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....ltry feeds does not amount to mere mixing together of all different ingredients, without involving any change in the chemical composition of the ingredients. (iii) That the Ld. CIT(A) has erred in accepting that the process of preparation of poultry feeds amount to production of an article within the meaning of section 80IB & 80IE. (iv) That the Ld. CIT(A) has erred in allowing the entire amount of Rs.1,72,97,476/- claimed as deduction u/s 80-IB. (v) That the Ld. CIT(A) has erred in directing the A.O. to net off the interest income credited in the profit and loss account of the eligible undertaking against the interest expense debited in the said profit and loss account without the appreciating the facts and circumstances of the case supported by the decision of Hon'ble Supreme Court in the case of Pandian Chemicals Limited Vs. CIT,[2003] 129 TAXMAN 539 (SC) and the decision of High Court of Jammu and Kashmir in the case of Asian Cement Industries Vs Income Tax Appellate Tribunal, [2012] 28 TAXMAN 290(Jammu & Kashmir). (vi) That the Ld. CIT(A) has erred in directing the A.O. to re-compute the income of the eligible undertaking and recompute the deduction u/s 80IB af....
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....;s own case, the finding of Id, CIT(A) on this issue stands confirmed and the grounds of appeal raised by the Revenue in all the appeals on this issue are dismissed". 11. As the issue involved in the year under consideration as well as the material facts relevant thereto are similar to A.Y. 2010-11, we respectfully follow the order of the Tribunal for A.Y. 2010-11 and uphold the impugned order of the ld. CIT(Appeals) holding the business of the assessee as eligible for deduction under section 80IB. Grounds No. 1 to 4 of the Revenue's appeal are accordingly dismissed. 12. As regards Grounds No. 5 & 6 of the Revenue's appeal for A.Y. 201112, it is observed that the common issue involved therein relating to the exclusion of only the net interest income for computing the profit eligible for deduction under section 80IB is similar to the one involved in Revenue's appeal for A.Y. 2008-09, which has been decided by us in the foregoing portion of this order. Following our conclusion drawn in A.Y. 2008-09, we uphold the impugned order of the ld. CIT(Appeals) giving relief to the assessee on this issue and dismiss Grounds No. 5 & 6. 13. As regards Ground No. 7 of the Revenue's appeal for....
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.... impugned order of the ld. CIT(Appeals) computing the disallowance under section 14A read with Rule 8D only on the investment in the shares of Punjab National Bank. Ground No. 7 of the Revenue's appeal is dismissed. 15. Now we shall take up the Revenue's appeal for A.Y. 2012-13 being IT(SS)A No. 136/KOL/2016, which is directed against the order of the ld. CIT(Appeals)-20 dated 27.09.2016. The grounds raised by the Revenue in this appeal read as under:- "(i) That the Ld. CIT(A) has erred in accepting that the term 'manufacture' occurring in the context of section 80- IB & 80IE does not necessarily require that the end product of the manufacturing process is to be completely different from the ingredients, as regards its chemical composition, integral structure or its use. (ii) That the Ld. CIT(A) has erred in accepting that the process of manufacturing of poultry feeds does not amount to mere mixing together of all different ingredients, without involving any change in the chemical composition of the ingredients. (iii) That the Ld. CIT(A) has erred in accepting that the process of preparation of poultry feeds amount to production of an article within the meaning of ....
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....ng activity not manufacturing. The Tribunal held that the case of the assessee Amrit Feeds (supra) was entirely different. The assessee's eligible undertaking itself was carrying out the complete activity i.e. from grinding till the pelletisation. The raw materials once consumed could no! be reconverted into the same position, Its utility gets changed, The prime raw materials such as, maize, soya oil, rice bran etc. can no more be regarded to be the rice bran, soya oil, maize. We are of the view that the issue in the Revenue's appeal is squarely covered against the revenue by the decision of the Coordinate Bench of this Tribunal in assessee's own case for the earlier years which was based on the decision rendered in the case of Amrit Feeds (supra). Respectfully following the decision of the Coordinate Bench of this Tribunal in assessee's own case, the finding of Id, CIT(A) on this issue stands confirmed and the grounds of appeal raised by the Revenue in all the appeals on this issue are dismissed". 17. As the issue involved in the year under consideration as well as the material facts relevant thereto are similar to A.Y. 2010-11, we respectfully follow the order o....