The High Court on 18.04.2019, in Sesa Industries Limited v Commissioner of Income-tax, had permitted the appeal that had been made by the Assessee, contesting the Income Tax Appellate Tribunal, Panaji Bench’s order upon question arising out of law.
FACTS:
The Assessee filed the original income return for that particular year for assessment under appeal , of a net income of 20,79,53,900/- which was based upon the profit according to the accounts of that year. A revise return was further filed for claiming deduction under Section 80-IB for its industrial undertakings of 5, 74, 90,089/-.The Assessing Officer, while considering the net income had computed such deduction under the aforesaid section of the Act but only upon such profits that had arisen from the Pig Iron sale, without giving regard to the profit that arose from the slag sale, that was considered as a byproduct in the Pig Iron manufacturing, by the Assessee.
An order was passed by the Commissioner against the assessment order while upholding that profit that h has been earned upon sale should be regarded as a part of such profit being derived from such business. Subsequently, an appeal was made before the Income Tax Appellate Tribunal, against the order the CIT (A).
The Income Tax Appellate Tribunal while permitting the Revenue’s appeal by an order upheld such profit shall not be considered to be have been extracted from industrial undertaking business, thereby resulting in an appeal before the High Court.
ISSUE: If the profit arising from sale of slag, being a by-product in the manufacturing of Pig Iron, can be considered as profit from business of the industrial undertaking for deduction u/s. 80-IB ?
CONTENTIONS RAISED BY THE APPELLANT:
It had been contested from the Appellant’s side that the submission pertaining to the primary and by product form a fundamental part of an activity of a product in an industrial undertaking, hence the byproduct ought to be considered as an integral part of such profit which has been extracted from industrial undertaking business.
CONTENTIONS RAISED BY THE RESPONDENT:
The respondent on the other hand while supporting the contention, that such slag that had been derived from the activity pertaining to manufacturing does not stand eligible for deduction under the aforesaid section of the Act.
DECISION HELD BY THE HIGH COURT:
The High Court while emphasizing upon Section 80-IB of the Act opined that the net total income shall be inclusive of the profits that has been generated from the business and as per the provisions of the sections, deduction from the profits of an amount that shall be equivalent to such percentage and for those many assessment years as mentioned in the relevant section, thereby allowing the appeal in favor of the Appellant.
