COMMISSIONER OF INCOME TAX-V V. AREEZ P KHAMBHATA

TAXAP/78/2012

AI Insights

The case involves the Commissioner of Income Tax-V appealing against Areez P Khambhata concerning deductions claimed under Section 80IB of the Income Tax Act. The primary issues revolved around whether the Appellate Tribunal was correct in allowing deductions without fulfilling the conditions stipulated under Section 80IB, and whether deductions for unspent salary amounts were permissible. The Assessing Officer initially found that the assessee did not have more than 10 workers, a requirement for the deduction under Section 80IB. However, this was overturned by the CIT (Appeals) after considering additional evidence such as the ESI Inspector's report, which included workers from another unit of the assessee. The Tribunal agreed with the CIT (Appeals), leading to the dismissal of the Revenue's appeal by the High Court.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 729416 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 09-08-2012
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: MAUNA BHATT
• Keywords: Deduction; Industrial Undertaking; Salary deduction; Tax appeal; Workers
• Section: 80IB; 80AB

Judgement Text

"TAXAP/78/2012 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No. 78 of 2012 With TAX APPEAL No. 79 of 2012 For Approval and Signature: HONOURABLE MR.JUSTICE V. M. SAHAI HONOURABLE MR.JUSTICE N.V. ANJARIA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment? No 2 To be referred to the Reporter or not? No 3 Whether their Lordships wish to see the fair copy of the judgment? No 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder? No 5 Whether it is to be circulated to the civil judge? No ========================================================= COMMISSIONER OF INCOME TAX-V Versus AREEZ P KHAMBHATA ========================================================= Appearance : MRS MAUNA M BHATT for Appellant(s) : 1, None for Opponent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE V. M. SAHAI and HONOURABLE MR.JUSTICE N.V. ANJARIA Date : 09/08/2012 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE V. M. SAHAI) We have heard Mr. M. R. Bhatt, learned senior standing counsel assisted by Ms.Mauna Bhatt, learned counsel for appellant. TAXAP/78/2012 2/3 JUDGMENT 2. This tax appeal has been filed on the following two proposed substantial questions of law. “[A]. Whether the Appellate Tribunal is right in law and on facts in allowing assessee deduction u/s 80IB of I.T. Act without considering that the conditions laid down u/s 80IB of I.T.Act have not been fulfilled? [B] Whether the Appellate Tribunal is right in law and on facts in allowing assessee deduction of salary amount of Rs.1,50,000/­ being not actually spent? [C] Whether the Appellate Tribunal is right in law and on facts in setting aside the view of AO that in view of sectioned 80AB no profit from Industrial undertaking is included in the gross total income and hence such deduction would not be permissible?” 3. Under Section 80IB of the Income Tax Act if the assessee has ten or more workers then assessee is entitled to claim of deduction. The Assessing Officer came to the conclusion that the assessee was not having more than 10 workers. This finding recorded by the Assessing Officer has been reversed by the Commissioner of Income Tax (Appeal). After analyzing statement recorded by the Assessing Officer during the course of survey and inspection report of the Factory Inspector on two accounts. In the inspection report of ESI Inspector, number of workmen and names of workmen engaged in the unit had been mentioned. The CIT (Appeal) came to the conclusion that the Assessing Officer only considered workers engaged in one unit whereas the assessee had another washing unit having same activity. Therefore, the workers engaged in total TAXAP/78/2012 3/3 JUDGMENT washing unit was also required to be considered while computing total number of workers employed by the assessee. The CIT(Appeal) also found that wages register, attendance register and inspection reports of ESI Inspector also supports the version of the assessee. Therefore, CIT(Appeals) allowed the appeal of the assessee for the Assessment Year 2003­04 and Assessment Year 2006­07. The Appeal filed by the revenue has been dismissed by the Tribunal being agreed with the view taken by the CIT (A). 4. After hearing learned counsel for the Revenue, we do not find that the question raised by the Revenue raises any substantial question of law. The appeals are concluded finding of fact and accordingly these Tax Appeal are dismissed. [V . M. SAHAI, J.] [N. V . ANJARIA, J.] Amit "