Jewel Consumer Care Pvt.Ltd., Baroda V. The ACIT.,Circle-1(2), Baroda

ITA 1094/AHD/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9360 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 04-11-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 27-03-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJEET KUMAR
• Section: 143(3); 80IB; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD D BENCH (BEFORE S/SHRI G.D.AGARWAL, VICE-PRESIDENT AND MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER) ITA NO.1094/AHD/2008 [ASSTT. YEAR : 2001-2002] JEWEL CONSUMER CARE P. LTD. SUBHAAG, B-15/16, RAMIN PARK OLD PADRA ROAD, BARODA 390 020. VS. ACIT, CIR.1(1) BARODA. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI JAIMIN GANDHI REVENUE BY : SHRI ABHIJEET KUMAR O R D E R PER G.D. AGARWAL, VICE-PRESIDENT : THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-V, AHMEDABAD DATED 27.02.2008 ARISING OUT OF THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 143(3) RWS 147 OF THE INCOME T AX ACT. 2. THE ONLY GROUND RAISED IN THIS APPEAL OF THE ASS ESSEE IS AGAINST DISALLOWANCE OF DEDUCTION UNDER SECTION 80IB OF THE INCOME TAX ACT. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. WE FIND THAT THE AO DISALLOWED THE ASSESSEES CLAIM ON THE ONLY GROUND THAT THE ASSESSEE IS NOT REGISTERED AS AN SSI UNIT UNDER THE PROVISIONS OF INDUSTRIAL DEVELOPMENT AND REGULATIONS ACT BECAUSE THE ASSESSEE WAS ISSUED ONLY PROVISIONAL REGISTRATION CERTIFICATE. WHILE T AKING THIS VIEW, THE AO RELIED UPON THE ASSESSEES OWN CASE FOR A.Y.1999-2000 WHI CH WAS ALSO AFFIRMED BY THE CIT(A). HOWEVER, AT THE TIME OF HEARING BEFORE US, IT WAS POINTED OUT BY THE LEARNED COUNSEL THAT IN THE ASSESSMENT YEAR 199 9-2000, IN THE APPEAL FILED BY THE ASSESSEE, THE ITAT REVERSED THE FINDING OF T HE CIT(A) AND DIRECTED THE AO TO ALLOW THE ASSESSEES CLAIM FOR DEDUCTION UNDE R SECTION 80IA. COPY OF THE ORDER IS FURNISHED BEFORE US. ITA NO.1094/AHD/2008 -2- 4. CONSIDERING THE ARGUMENTS BOTH THE SIDES ON THIS ISSUE, WE FIND THAT THE ITAT HAS CONSIDERED THE IDENTICAL ISSUE IN ASSESSEE S OWN CASE FOR A.Y.1999- 2000 VIDE ORDER DATED 17-9-2010 IN ITA NO.1342/AHD/ 2005. IN THIS CASE, THE ITAT HELD AS UNDER: 4. NOW BEFORE US, AN ORDER OF THE RESPECTIVE CO-O RDINATE BENCH C OF THE ITAT, AHMEDABAD IN THE CASE OF KHS MACHINERY PVT. LTD. VS. ITO, ITA NO.2278/AHD/2006 DATED 19-12-2008 IS PLACE D ON RECORD WHEREIN VIDE PARA-9, AN OBSERVATION HAS BEEN MADE T HAT THE REGISTRATION IS NOT A PRE-CONDITION TO AVAIL THE BENEFIT OF DEDU CTION UNDER SECTION 80IB OF THE ACT. THE RELEVANT PORTION IS REPRODUCE D BELOW: 9. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. AT THE OUTSET, WE MAY ADVERT TO THE C ONTENTION OF THE LD. DR THAT REGISTRATION OF AN INDUSTRIAL UNDERTAKI NG AS AN SSI IS NECESSARY FOR CONFERRING THE BENEFIT U/S.80IB OF TH E ACT. WE DO NOT FIND ANY SUCH REQUIREMENT I THE SECTION 80IB OF THE ACT NOR THERE IS ANY FINDING ON THIS ASPECT IN THE IMPUGNED ORDER. THE REGISTRATION OF AN INDUSTRIAL UNDERTAKING AS AN SSI MAY ENTAIL CERTAIN BENEFITS UNDER THE INDUSTRIAL AND LABOUR LA WS. THERE IS NO SUCH PRECONDITION OF REGISTRATION TO AVAIL THE BENE FIT OF DEDUCTION U/S.80IB OF THE ACT. THEREFORE, THE CONTENTION OF THE LD. DR BEING DEVOID OF MERITS IS REJECTED. THE ONLY DISPUTE BEF ORE US IS AS TO WHETHER THE TAXPAYER IS A SMALL SCALE INDUSTRIAL UN DERTAKING WITHIN THE MEANING OF PROVISO TO SEC. 80IB(2)(III) READ WITH CLAUSE (G) OF SEC.80IB(14) OF THE ACT. THE RELEVAN T CLAUSE (G) DEFINES SMALL SCALE INDUSTRIAL UNDERTAKING (SSI) IN THE FOLLOWING TERMS: XXXXX IN ADDITION TO THE ABOVE DECISION OF THE RESPECTIVE CO-ORDINATE BENCH, WE HAVE ALSO BEEN INFORMED THAT IN ASSESSEES OWN C ASE FOR THE SAME ASSESSMENT YEAR, THE REVENUE HAS CHALLENGED CERTAIN FINDINGS OF THE FIRST APPELLATE AUTHORITY PASSED IN THE FIRST ROUND OF TH E APPEAL, AS REFERRED ABOVE, THROUGH WHICH THE MATTER WAS REMANDED BACK T O THE AO WITH CERTAIN DIRECTIONS. HOWEVER, THE TRIBUNAL HAS CON FIRMED ALL THESE FINDINGS IN APPEAL IN ITA NO.3356/AHD/2003 (A.Y.199 9-2000) ORDER DATED 10-10-2006 (BENCH B, AHMEDABAD). THE RELEV ANT PORTION IS REPRODUCED BELOW: LEARNED COUNSEL FOR THE ASSESSEE, IN REPLY CONTEND S THAT ASSESSEE IS MANUFACTURER OF TOOTH BRUSH HANDLES FRO M PLASTIC ITA NO.1094/AHD/2008 -3- GRANULES, WHICH IS RAW-MATERIAL. THESE GRANULES AR E PUT TO MANUFACTURING PROCESS AND VARIOUS TYPES OF HANDLES MANUFACTURED WHICH IN TURN ARE SOLD TO VARIOUS TOOT H BRUSH MANUFACTURING UNIT WHO PUT IN DIFFERENT TYPE OF BRI STLES TO MAKE TOOTH BRUSHES. IT WAS CONTENDED THAT SIMILAR ISSUE AROSE IN THE CASE OF SISTER CONCERN OF THE ASSESSEE VIZ. RUBY MO ULDERS PVT. LTD. CIT(A) HELD THIS TO BE MANUFACTURING AND ALL OWED CLAIM OF DEDUCTION UNDER SECTION 80IA. WHILE DECIDING THIS APPEAL, CIT(A) HAS RELIED ON THE CASE OF RUBY MOULDERS PVT. LTD. AGAINST WHICH DEPARTMENT HAS NOT FILED ANY APPEAL. LEARNED DR COULD NOT CONTROVERT ARGUMENTS OF LEARN ED COUNSEL THAT IN THE CASE OF RUBY MOULDERS PVT.LTD. DEPARTME NT HAS NOT FILED ANY APPEAL. 3. IN THE GIVEN FACTS AND CIRCUMSTANCES, IT EMERGES FROM RECORD THAT DEPARTMENT HAS ACCEPTED FINDINGS OF CIT (A) IN SISTER CONCERN CASE HOLDING SIMILAR ACTIVITY I.E. MANUFACT URE OF TOOTH BRUSH HANDLES FROM GRANULES AS MANUFACTURING ACTIVI TY, ON WHICH CLAIM UNDER SECTION 80IA HAS BEEN ALLOWED. IN VIEW THEREOF, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) ALLOWING S IMILAR CLAIM. THOUGH FROM THE SIDE OF THE REVENUE, THE LEARNED DR HAS TRIED TO EXPLAIN THAT AS PER THE SAID SCHEME, IT WAS NECESSA RY TO OBTAIN REGISTRATION BUT WE ARE NOT EXAMINING THE CLAIM OF REGISTRATION OF SSI UNIT AS PER THE GOVT. OF GUJARAT, INDUSTRIES AND MI NES DEPARTMENT. RATHER, WE ARE EXAMINING THE PROVISO OF SECTION 80I A WHEREIN VIDE CLAUSE (F) OF SUB-SECTION 12 OF SECTION 80IA HAS DE FINED THE DEFINITION OF SMALL SCALE UNDERTAKING AS FOLLOWS: (F) SMALL-SCALE INDUSTRIAL UNDERTAKING MEANS AN I NDUSTRIAL UNDERTAKING WHICH IS, AS ON THE LAST DAY OF THE PRE VIOUS YEAR, REGARDED AS A SMALL-SCALE INDUSTRIAL UNDERTAK ING UNDER SECTION 11B OF THE INDUSTRIES (DEVELOPMENT AN D REGULATION) ACT, 1951 (65 OF 1951). 5. IF WE CAREFULLY EXAMINE THIS SUB-CLAUSE, AS EMPH ASIZED BY THE LEARNED AR, THE TERM INDUSTRIAL UNDERTAKING IS TO BE REGARDED AS AN SSI UNDER SECTION 11B OF THE INDUSTRIAL (DEVELOPMENT AN D REGULATION) ACT. THE QUALIFYING WORD IS NOT REGISTERED, BUT THE WO RD IS REGARDED. THEREFORE, THE LEARNED AR VEHEMENTLY ARGUED THAT IT WAS AN ADMITTED FACT THAT THE DIC HAS REGARDED THIS UNDERTAKING AS A SMALL INDUSTRIAL UNIT BY ISSUING A PROVISIONAL CERTIFICATE, BUT SOMEHOW T HE FINAL CERTIFICATE OF REGISTRATION COULD NOT BE ISSUED BY THE DEPARTMENT, NEVERTHELESS, THE ASSESSEE HAD ALWAYS BEEN REGARDED AS AN SSI UNIT BY ALL THE DEPARTMENTS, ITA NO.1094/AHD/2008 -4- INCLUDING EXCISE DEPARTMENT. WE FIND FORCE IN THE ARGUMENTS OF THE LEARNED AR AND CONSIDERING THE VIEW ALREADY TAKEN B Y THE RESPECTIVE CO- ORDINATE BENCH, AS STATED ABOVE, WE HEREBY HOLD THA T THE ASSESSEE MUST NOT BE DENIED THE CLAIM OF DEDUCTION UNDER SECTION 80IA MERELY ON THIS TECHNICAL GROUND. WE HEREBY DIRECT THE AO TO ALLOW THE CLAIM AS PER THE LAW. SINCE THE FACTS OF THE YEAR UNDER CONSIDERATION ARE IDENTICAL, WE RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE ITAT IN ASSESSE ES OWN CASE, DIRECT THE AO TO ALLOW THE CLAIM OF THE ASSESSEE UNDER SECTION 80 IB IN ACCORDANCE WITH LAW. 5. IN RESULT, THE ASSESSEESS APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 26 TH NOVEMBER, 2010. SD/- SD/- (MUKUL KUMAR SHRAWAT) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 26-11-2010 COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD