Whether ITAT justified in law in allowing deduction u/s 80IB on labour job receipts ignoring the fact that such income is not ‘derived from’ the eligible business?

Metalman Auto Pvt. Ltd. Vs. CIT, Ludhiana(High Court of Punjab and Haryana At Chandigarh) – Whether ITAT is justified in law in allowing deduction u/s 80IB on labour job receipts ignoring the fact that such income is not ‘derived from’ the eligible business of industrial undertaking of the assessee company? – Whether ITAT is justified in law in allowing deduction u/s 80IB on other miscellaneous income being misc. receipts, rebate & discount and balances written off etc. whereas such income is not ‘derived from’ the eligible business of industrial undertaking of the assessee company? 

Income-tax Appeal No. 840 of 2010

Date of decision: 11.2.2011

Commissioner of Income-Tax, Ludhiana Versus M/s Metalman Auto Pvt. Ltd.

CORAM: HONORABLE MR.JUSTICE ADARSH KUMAR GOEL HONORABLE MR.JUSTICE AJAY KUMAR MITTAL

Present: Mr. Rajesh Katoch, Advocate for the appellant.

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ADARSH KUMAR GOEL, J (Oral) .

1. This order will dispose of Income Tax Appeals No.839 and 840 of 2010 as it has been stated by the learned counsel for the revenue that both the appeals relate to same assessee and involve some common questions.

2. ITA No.840 of 2010 has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (for short “the Act”) against the order dated 29.1.2010   of the Income Tax AppellateTribunal, Chandigarh Bench ‘B’, Chandigarh in I.T.A. No.602/CHD/2008 for the assessment year 2004-05 proposing to raise following substantial questions of law:-

“i) Whether on the facts and circumstances of the case, Hon’ble Income Tax Appellate Tribunal is justified in law in allowing deduction u/s 80IB on labour job receipts ignoring the fact that such income is not ‘derived from’ the eligible business of industrial undertaking of the assessee company?