derived from

2009-TIOL-572-ITAT -MUM

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.

2009-TIOL-100-SC-IT

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.