The Commissioner Of Income Tax, Chennaim/S.nithya Packaging P. Ltd.,Pondicherry-1 v. Appellate Tribunal Was Right In Law Inholding That The Scrap Ales Generated Iseligible For Deduction Under Section 80Ib Ofthe Income Tax Act, 1961 ?

In the High Court of Judicature at Madras Dated : 02.1.2019 Coram : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mr.Justice N.SATHISH KUMAR Tax Case Appeal No.466 of 2012 The Commissioner of Income Tax, ChennaiM/s.Nithya Packaging P. Ltd.,Pondicherry-1 Vs ...Appellant ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961against the order dated 11.7.2012 in ITA No.844/Mds/2012 on thefile of the Income Tax Appellate Tribunal Madras 'D' Bench forthe assessment year 2008-09, against the order of theCommissioner of Income Tax (Appeals)-XII, Chennai 34, in ITANo.246/2010-11, dated 24/01/12, for the Assessment Year 2008-09. For Appellant : Mr.T.Ravikumar, SSC For Respondent :M/s.Subbaraya Aiyar Padmanabhan Judgment was delivered by T.S.SIVAGNANAM,J Heard the learned Senior Standing Counsel for the appellant. 2. This appeal by the Revenue challenges the order passed bythe Income Tax Appellate Tribunal, which decided the issue infavour of the assessee. The appeal was admitted on 04.1.2013 onthe following substantial questions of law :“i. Whether, on the facts and in thecircumstances of the case, the Income Tax (2) Appellate Tribunal was right in law inholding that the scrap ales generated iseligible for deduction under Section 80IB ofthe Income Tax Act, 1961 ? https://hcservices.ecourts.gov.in/hcservices/ ii. Whether, on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in law inholding that the income from treatment ofexpenses of earlier years as income,insurance claim received and gain fromexchange differences are relatable to themanufacturing activity of the assessee andas such, eligible for computation ofdeduction under Section 80IB of the Act? Andiii. Is not the finding of the Tribunalperverse as it has not gone into the aspectfor finding out that the income was notdirectly connected with the assessee'smanufacturing activity while allowing thededuction under Section 80IB?” 3. The Revenue seeks to withdraw this appeal on account oflow tax effect in terms of Circular No.3 of 2018 dated 11.7.2018issued by the Central Board of Direct Taxes. 4. In the light of the above, the appeal is dismissed aswithdrawn and the substantial questions of law framed are leftopen. In the event the tax effect is above the threshold limitfixed in the said circular under exceptional clauses mentionedin the circular, liberty is granted to the Revenue to make amention to this Court to restore the appeal to be heard anddecided on merits. No costs. Sd/- Assistant Registrar(CS V) To Sub Assistant Registrar +1cc to Mr.Subbaraya Aiyar, Padmanabhan, Advocate sr.221 https://hcservices.ecourts.gov.in/hcservices/