Case Law Details
Brief Facts of the Case
In the present case the Hon’ble Tribunal held that the Forex gains or losses after the sale receipts would be treated as an amount which will be eligible for deduction under section 10B. On the second issue, the Hon’ble Tribunal held that the amount received after sale of scrap will be eligible to be deducted u/s 80IC.
Facts of the Case
The assessee is carrying on the activity at three different units, in which two are registered 100% EOU for manufacturing plastic containers and the third unit is for manufacturing shampoo products. The income derived from the 100% EOU at Hyderabad is exempt u/s 10B of the I.T. Act and the income derived at Baddi is eligible for deduction u/s 80IC of the I.T Act. Separate books of account were maintained for all the units together. The assessee claimed deduction u/s 80IC of Rs.1,63,08,828 and exemption u/s 10B of Rs.1,05,60,996. The Assessing officer sought for explanations with regard to exemption u/s 10B and deduction u/s 80IC of the I.T. Act. The assessee submitted all such details. The Assessing officer completed the assessment u/s 143(3) on 5.12.2011 determining the total income at Rs.1,25,38,317. While doing so he restricted the exemption u/s 10B to Rs.19,29,860 and deduction u/s 80IC to Rs.1,53,28.227.
With respect to non-inclusion of Rs.44,83,952/- being the gain on fluctuation in foreign from the eligible profits and the export turnover. The Assessing officer is of the view that the forex gain or loss is not attributable to the manufacturing activity and because the money is received in Euros and kept by the company in the EEFC Current account; the withdrawal of the money converting foreign exchange into rupees is being made as per its business exigencies and, therefore, the gain derived cannot be considered as the income derived from the industrial undertaking.
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