M/s G R Engineering Works Ltd Vs ACIT, Mumbai (Dated: April 16, 2009)
authorities in respect of rent and in the view of Apex Court decision
in CIT Vs. Pandian Chemical Ltd in respect of interest, the assessee is notentitled for
80IB deduction - Assessee's Appeal dismissed.
M/s Liberty India Vs CIT (Dated: August 31, 2009)
Income tax - Sec 80IB - Assessee is a small scale manufacturer of fabrics - also
undertakes exports of various textile items - claims deductions for Duty Drawback and
DEPB benefits under Sec 80IB - AO disallows - CIT(A) allows deduction of duty
drawback but not of DEPB - Tribunal rejects assessee's appeal - HC holds the
assessee has failed to provide nexus between the receipt by way of exports incentives
and the industrial undertaking and rejects the appeal - held, Duty Drawback and DEPB
Benefits do not form part of the net profits of eligible industrial undertaking - the
profits derived by way of such incentives do not fall within the expression "profits
derived from industrial undertaking" in Section 80-IB.
Application of Accounting Standard -2 of the ICAI: The duty drawback, DEPB benefits
and rebates 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 first degree
nexus between profits and the industrial undertaking.