DCIT, Circle-1(3), Hyderabad V. M/s Blend Colurs Private Limited, Hyderabad

ITA 1393/HYD/2014

• Counselvise Citation: 139322514 RSA 2014
• Duration Of Justice: 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 11-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: K L RATHI
• Keywords: Revised return
• Section: 143(3); 80IB; 139(5)

Judgement Text

ITA NO.1393 OF 2014 BLEND COLOURS PVT LTD HYDERABAD PAGE 1 OF 11 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SMT.ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.1393/HYD/2014 (ASSESSMENT YEAR: 2010-11) DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(3) HYDERABAD VS. M/S. BLEND COLOURS PRIVATE LIMITED HYDERABAD PAN: AACCB 2492 A (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI RAMAKRISHNA BANDI, DR ASSESSEE BY: SHRI K.L. RATHI, ADV OCATE DATE OF HEARING: 10/12/2014 DATE OF PRONOUNCEMENT: 06/02/2015 O R D E R PER SMT. ASHA VIJAYARAGHAVAN, J.M. REVENUE HAS FILED THIS APPEAL AGAINST THE ORDER OF THE CIT (A)-II HYDERABAD DATED 21.05.2014 RELATING TO A.Y 2 010-11. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF ADDITIV ES AND FILLERS USED IN PLASTIC INDUSTRY FOR COLOURING OF PRODUCTS. IT E-FILED ITS ORIGINAL RETURN ON 19.04.2011 ADMITTING AN INCOME O F RS.1,69,79,531. IT FILED REVISED RETURN ON 19.04.20 11 ADMITTING INCOME OF RS.1,18,85,672. IN THE REVISED RETURN OF INCOME, DEDUCTION U/S 80IB OF RS.50,93,859 WAS CLAIMED. THE SCRUTINY ASSESSMENT U/S 143(3) WAS COMPLETED ON 28.03.2013 DETERMINING THE INCOME AT RS.1,95,57,967 BY MAKING CERTAINDISALLOWANCES. ITA NO.1393 OF 2014 BLEND COLOURS PVT LTD HYDERABAD PAGE 2 OF 11 3. THE MAIN ISSUE IN THIS CASE IS DISALLOWANCE OF 8 0IB DEDUCTION OF RS.50,93,859. THE REASONS GIVEN BY THE AO FOR SUCH DISALLOWANCES ARE: * IN THE ORIGINAL RETURN, NO DEDUCTION UNDER 80IB W AS CLAIMED. SUCH CLAIM WAS MADE ONLY IN THE REVISED RE TURN. AS PER SECTION 80AC, DEDUCTION U/S 80IB CAN BE ALLO WED ONLY IN CASES WHERE SUCH CLAIM WAS MADE IN RETURN F ILED U/S 139(1). * AS PER FORM NO.10CCB, THE DATE OF COMMENCEMENT OF OPERATION WAS MENTIONED AS 06.03.1999 I.E. FIRST YE AR OF OPERATIONS WAS 1998-99 I.E. A.Y 1999-2000. THE 80IB DEDUCTION CLAIM CAN BE MADE FOR 10 CONSECUTIVE YEAR S, THEREFORE, THE 10 TH YEAR OF CLAIM OF SUCH DEDUCTION WOULD BE A.Y 2008-09. THE PRESENT YEAR I.E. A.Y 2010-11 IS T HE 12 TH A.Y AND THEREFORE, NO DEDUCTION CAN BE ALLOWED. * DURING THE ASSESSMENT PROCEEDINGS, IT WAS EXPLAIN ED BY THE ASSESSEE THAT THE COMMENCEMENT OF OPERATIONS WA S MENTIONED AS 6.3.1999 IN FORM 10CCB, BUT ACTUALLY T HE PRODUCTION STARTED ONLY FROM 12.04.2000, THEREFORE, THE FIRST YEAR OF OPERATION IS 2001-02. DURING THE PERI OD BETWEEN 6.3.1999 AND 12.04.2000 THERE WAS ONLY TRIA L PRODUCTION, BUT NO COMMERCIAL OPERATIONS HAD COMMEN CED. WHEN THE AR WAS ASKED TO FURNISH THE ANNUAL RETURN FOR FINANCIAL YEAR 1998-99 TO 2000-01 TO KNOW WHETHER T HE ASSESSEE HAD REPORTED ANY SALES, THE AR EXPRESSED H IS INABILITY TO PRODUCE THE DETAILS CALLED FOR. INSTEA D, THE AR FURNISHED CERTIFICATE OF COMMENCEMENT OF OPERATIONS ISSUED BY INDUSTRIES DEPARTMENT WHEREIN THE DATE OF COMMENCEMENT OF COMMERCIAL PRODUCTIONS WAS MENTIONE D ITA NO.1393 OF 2014 BLEND COLOURS PVT LTD HYDERABAD PAGE 3 OF 11 AS 09.01.2002. HOWEVER, THE ASSESSEE CLAIMED THAT T HE COMMERCIAL PRODUCTION COMMENCED FROM 12.04.2000. TH E CERTIFICATE ISSUED BY THE INDUSTRIES DEPARTMENT WAS FOR THE PURPOSE OF CLAIMING STATE TAX DEFERMENT FOR A PERIO D OF 14 YEARS FROM 09.01.2002 TO 08.01.2006. SINCE THE SALE S TAX DEFERMENT IS FOR A FIXED PERIOD, IT IS NOT THE CONC ERN OF SALES TAX DEPARTMENT TO ENQUIRE INTO THE INITIAL YEAR OF MANUFACTURING OR PRODUCTION. 4. THE ASSESSEE SUBMITTED THAT: THE CLAIM OF 80IB(3) WAS MADE IN THE ORIGINAL RETUR N ITSELF WHICH IS EVIDENT FROM THE COMPUTATION OF TOTAL INCO ME. HOWEVER, IN THE E-FILED RETURN, 80IB COLUMN WAS LEF T UNFILLED BY OVERSIGHT. HOWEVER, THE TAX COMPUTED OF RS.17,04,493 MENTIONED IN E-FILED RETURN IS ONLY AF TER CLAIMING 80IB DEDUCTION. SECTION 80AC DOES NOT PROHIBIT FILING OF REVISED RE TURN WHICH THE ASSESSEE IS LEGITIMATELY ENTITLED TO. WHE THER THE CLAIM CAN BE MADE ONLY IN RETURN FILED U/S 139(1) O R CAN BE CLAIMED IN RETURN FILED U/S 139(5) IS A DEBATABLE I SSUE. THE HON'BLE SUPREME COURT IN NUMBER OF CASES HELD THAT WHEREVER THE LAW IS PRONE TO MULTIPLE INTERPRETATIO NS, THE INTERPRETATION WHICH FAVOURS THE ASSESSEE HAS TO BE ADOPTED. THERE ARE DEPARTMENT INSTRUCTIONS ALSO DIR ECTING THE AO TO GIVE ALL THE STATUTORY DEDUCTIONS WHICH T HE ASSESSEE IS ENTITLED TO EVEN IF SUCH CLAIMS WERE OM ITTED BY THE ASSESSEE, DUE TO LACK OF KNOWLEDGE AND AO IS NO T SUPPOSED TO TAKE ADVANTAGE OF IGNORANCE OF THE ASSE SSEE. ITA NO.1393 OF 2014 BLEND COLOURS PVT LTD HYDERABAD PAGE 4 OF 11 IN FORM NO.10CCB, THE DATE OF OPERATION WAS CORRECT LY MENTIONED BY AUDITORS AS 6.3.1999, THE DATE ON WHIC H THE COMPANY WAS GIVEN THE STATUS OF SSI UNIT BY THE DEP TT. OF INDUSTRIES, GOVT. OF A.P. THE BASIC REQUIREMENT U/S 80IB(3)(II) IS THAT THE UNIT SHOULD BE A SSI UNIT. SECTION 80IB(3)(II) FURTHER REQUIRES THAT THE CLAIM CAN BE MADE IN THE YEAR THE INDUSTRIAL UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS AT ANY TIME DURING THE PERIOD BEGINNING ON 1 ST DAY OF APRIL, 1995 AND ENDING WITH 31 ST DAY OF MARCH, 2002. HERE TOO BASED ON THE DATE OF MANUFACTURE AND PRODUCTION OF ARTICLE OR TH ING, THE AUDITOR HAS RIGHTLY STATED THAT THE INITIAL A.Y THE COMPANY CLAIMED DEDUCTION U/S 80IB AS A.Y 2001-02 AND 10 YE ARS FROM THIS INITIAL A.Y IS A.Y 2010-11 I.E. THE YEAR UNDER SCRUTINY. COL.8 OF FORM NO.10CCB REFER TO DATE OF COMMENCEMEN T OF OPERATION/ACTIVITY BY THE UNDERTAKING AND COL.9 REF ER TO INITIAL A.Y OF CLAIM OF DEDUCTION. BOTH CLAUSES ARE ABSOLUTELY DIFFERENT FROM EACH OTHER, IF THEY WERE TO MEAN THE SAME THING, THERE IS NO NECESSITY TO INCLUDE TW O SEPARATE COLUMNS. FURTHER, LETTERS ADDRESSED TO INDUSTRIES DEPARTMENT AND SALES TAX DEPTT. PROVE THAT THE COMMERCIAL PRODUCTI ON HAD STARTED ON 12.04.2000. ASSESSEES LETTERS ADDRESSED ARE GIVEN BELOW: (A) LETTER TO G.M, DISTRICT INDUSTRIES CENTRE DATED 15.7.1999 STATING THAT PRODUCTION COULD NOT START DUE TO QUAL ITY ISSUE WHICH IS DULY ACKNOWLEDGED BY THEM. (B) LETTER DATED 8.5.2000 INTIMATING THE SAME DEPTT . ABOUT THE START OF COMMERCIAL PRODUCTION ON 12.04.2000 AG AIN ITA NO.1393 OF 2014 BLEND COLOURS PVT LTD HYDERABAD PAGE 5 OF 11 DULY ACKNOWLEDGED BY THEM. IN FACT ONLY PARTIAL PRO DUCTION COULD BEGIN FROM THIS DATE AND THE UNIT BECAME FULL Y OPERATIONAL FROM 09.01.2002. (C) FINAL ELIGIBILITY CERTIFICATE FIXING UP ELIGIBI LITY FOR SALES TAX DEPTT. ISSUED BY THE GOVT. OF A.P., COMMISSIONE RATE OF INDUSTRIES, A.P. HYDERABAD DT 24.06.2002 WHICH CLEA RLY MENTIONS THE DATE OF COMMENCEMENT OF COMMERCIAL PRODUCTION AS 09.01.202. (G) EARLIER THERE WAS A PROPRIETARY CONCERN NAMELY MASTER BLEND INDIA OWNED BY ONE OF THE DIRECTORS NAMELY SRI SARATH KUMAR RATHI WHICH WAS CONVERTED TO COMPANY NAMELY M/S BLEND COLOURS PVT. LTD W.E.F. 28.10.2003 . (H) THAT CLAIM U/S 80IB WAS ALLOWED IN A.Y 2009-10 IN EXACTLY IDENTICAL CIRCUMSTANCES. (I) THE TAXING STATUTES WHICH ARE BENEFICIAL TO THE ASSESSEE SHOULD BE LIBERALLY CONSTRUCTED AS HELD BY THE HON' BLE SUPREME COURT IN LARGE NUMBER OF CASES. 5. FROM THE ABOVE EVIDENCE, IT IS CLEAR THAT THOUGH IN COMPUTATION OF TOTAL INCOME, THE DEDUCTION U/S 80IB WAS MADE INADVERTENTLY IN E-FILED RETURN CHAPTER VIA, DEDUCT ION WAS SHOWN AT RS. NIL. TO CLEAR THIS DEFECT REVISED RETURN WAS FILED ON 19.04.2011 CLAIMING CHAPTER VIA DEDUCTION AT RS.50, 93,859. THEREFORE, THE REASONS GIVEN BYTHE AO THAT THE CLAI M WAS NOT MADE IN THE ORIGINAL RETURN AND THEREFORE, DEDUCTIO N CANNOT BE ALLOWED DOES NOT APPEAR TO BE ON SOUND FOOTING. IT IS PERTINENT TO MENTION THAT THE HON'BLE SUPREME COURT IN THE CASE OF BAJAJ TEMPO VS. CIT (1992) 3 SCC 78 HELD THAT AN INCENTIV E PROVISION SHOULD BE LIBERALLY CONSIDERED. FURTHER THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SAMBANDAN UDAY KU MAR ITA NO.1393 OF 2014 BLEND COLOURS PVT LTD HYDERABAD PAGE 6 OF 11 (2012) 345 ITR 389 (KAR.) HELD THAT THE BENEFICIAL SECTIONS ARE TO BE INTERPRETED LIBERALLY. 6. WITH REGARD TO THE ISSUE ARISING OUT OF FORM NO. 10CCB, AS PER RULE 18BBB, THIS REPORT IS TO BE SUBMITTED FOR CLAIMING DEDUCTING U/S 80I/80IA/80IB/80IC. COL. 8 & 9 OF FOR M 10CCB READ AS UNDER: 8 DATE OF COMMENCEMENT OF OPERATION/ACTIVITY BY THE UNDERTAKING OR ENTERPRISE .... 6.3 .1999 9. INITIAL A.Y FROM WHEN DEDUCTION IS BEING . 2001-02 CLAIMED. 7. ACCORDING TO THE ASSESSEE, THE COMMERCIAL PRODUC TION STARTED ONLY ON 12.04.2000 AND THEREFORE, THE FIRST YEAR OF CLAIMING 80IB DEDUCTION IS A.Y 2001-02. ACCORDING T O THE AO SINCE THE OPERATIONS WERE COMMENCED ON 6.3.1999 THE FIRST YEAR FOR CLAIMING DEDUCTION U/S 80IB WOULD BE A.Y 1999-2 000 AND THE PERIOD OF 10 YEARS END IN A.Y 2008-09. THEREFOR E, FOR A.Y 2010-11, NO CLAIM CAN BE MADE. 8. THE CIT(A) OBSERVED THAT FROM THE CAREFUL READIN G OF THE EVIDENCE SUBMITTED BY THE ASSESSEE, IT IS NOT CLEAR AS TO WHAT IS THE EXACT DATE OF COMMERCIAL PRODUCTION,WHETHER IT IS 12.04.2000 OR 9.1.2002. THE ASSESSEES CLAIM WOULD HAVE BEEN O N STRONG FOOTING HAD IT SUBMITTED THE FINAL ACCOUNTS FOR FIN ANCIAL YEAR 1999-2000 TO 2001-02. THE CIT (A) FURTHER OBSERVED THAT THE AR COULD NOT PRODUCE THE SAME AND EXPLAINED THAT THE P ROPRIETARY CONCERN NAMELY MASTER BLEND COLOURS INDIA OWNED BY ONE OF THE DIRECTORS NAMELY SRI SARATH KUMAR RATHI WAS CONVERT ED TO THE PRESENT COMPANY ON 28.10.2003, THE RECORDS PERTAINI NG TO PROPRIETARY CONCERN ARE NOT AVAILABLE. IN THESE CIR CUMSTANCES THE ITA NO.1393 OF 2014 BLEND COLOURS PVT LTD HYDERABAD PAGE 7 OF 11 CIT (A) OPINED THAT IT IS DIFFICULT TO CONCLUDE AS TO WHICHIS THE FIRST YEAR OF 80IB CLAIM. 9. THE CIT (A) IN HIS ORDER EXTRACTED THE PROVISION S OF SECTION 80IB(3). THE PROVISIONS OF SECTION 80IB(3) READ AS UNDER: (3) THE AMOUNT OF DEDUCTION IN THE CASE OF AN INDUSTRIAL UNDERTAKING SHALL BE TWENTY-FIVE PER CEN T (OR THIRTY PER CENT WHERE THE ASSESSEE IS A COMPANY ), OF THE PROFITS AND GAINS DERIVED FROM SUCH INDUSTRI AL UNDERTAKING FOR A PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS (OR TWELVE CONSECUTIVE ASSESSMENT YEARS WHERE THE ASSESSEE IS A CO-OPERATIVE SOCIETY) BEGINNING WITH THE INITIAL ASSESSMENT YEAR SUBJECT TO THE FULFILMENT OF THE FOLLOWING CONDITIONS, NAMELY : (I) IT BEGINS TO MANUFACTURE OR PRODUCE, ARTICLES O R THINGS OR TO OPERATE SUCH PLANT OR PLANTS AT ANY TI ME DURING THE PERIOD BEGINNING FROM THE 1ST DAY OF APR IL, 1991 AND ENDING ON THE 31ST DAY OF MARCH, 1995 OR SUCH FURTHER PERIOD AS THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, SPECIFY WI TH REFERENCE TO ANY PARTICULAR UNDERTAKING; (II) WHERE IT IS AN INDUSTRIAL UNDERTAKING BEING A SMALL SCALE INDUSTRIAL UNDERTAKING, IT BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS OR TO OPERATE ITS COLD STORAGE PLANT [NOT SPECIFIED IN SU B- SECTION (4) OR SUB-SECTION (5) AT ANY TIME DURING T HE PERIOD BEGINNING ON THE 1ST DAY OF APRIL, 1995 AND ENDING ON THE 31ST DAY OF MARCH, 2002. 10. THE CIT (A) STATED THAT ANOTHER ISSUE IN THIS C ASE IS WHETHER THE BENEFIT IS TO BE GIVEN EVEN IF THE UNIT IS CARRYING OUT TRIAL PRODUCTION (AS STATED BY THE AO) OR THE BENEF IT SHOULD BE GIVEN WITH REFERENCE TO STARTING OF COMMERCIAL PROD UCTION. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. HI NDUSTAN ANTIBIOTICS LTD (93 ITR 548) WAS RELIED ON BY THE C IT (A). ITA NO.1393 OF 2014 BLEND COLOURS PVT LTD HYDERABAD PAGE 8 OF 11 11. THE LD CIT (A) CONCLUDED THAT GOING BY THE WEIGHT OF EVIDENCE SUBMITTED BY THE ASSESSEE AND ALSO CONSIDE RING THE JUDICIAL PRECEDENTS ON THIS ISSUE, THE ASSESSEE IS ENTITLED FOR 80IB DEDUCTION OF RS.50,32,343/- AGAINST THE CLAIM OF RS .50,93,859/- AS THE INTEREST INCOME OF RS.2,05,053/- DOES NOT QU ALIFY FOR DEDUCTION U/S 80IB AS HELD IN THE CASE OF LIBERTY I NDIA VS. CIT (317 ITR 218 (SC), THEREFORE, THIS GROUND OF APPEAL IS PARTLY ALLOWED. 12. AGGRIEVED, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THE LD CIT (A) SHOULD HAVE SUSTAINED THE ORDER OF THE AO, AS THE ASSESSEE HAS FAILED TO BRING CONCLUS IVE EVIDENCE ON RECORD WITH REGARD TO INITIAL EVIDENCE OF COMMERCIAL PRODUCTION. 2. THE LD CIT (A) ERRED IN NOT NOTICING THAT THE ASSESSEE HAS FAILED TO PRODUCE EVIDENCE THAT IT IS NOT CLAIMING DEDUCTION U/S 80IB FOR THE INITIAL YEARS. 3. THE LD CIT (A) OUGHT TO HAVE GIVEN AN OPPORTUNIT Y TO THE AO BEFORE ADMITTING THE ADDITIONAL GROUND WITH REGARD TO THE ISSUE OF NON-COMPETE FEE UNDER RULE 46A DURING THE APPELLATE PROCEEDINGS. 13. WE HEARD BOTH PARTIES. 14. WE NOW PROCEED TO ADDRESS THE ISSUE IN APPEAL. FROM THE RECORD WE FIND THAT THE CLAIM OF 80IB(3) WAS MADE I N THE ORIGINAL RETURN ITSELF. HOWEVER, IN THE E-FILED RETURN, 80IB COL. WAS LEFT UNFILLED BY OVERSIGHT. THE ASSESSEE HAS IN THE COMP UTATION MENTIONED THAT IN THE E-FILED RETURN, IT HAD RETUR NED THE TAX COMPUTED AT RS.17,04,493/- I.E. ONLY AFTER CLAIMING 80IB DEDUCTIONS. FURTHER, THE AUDITOR HAS STATED THAT IN THE INITIAL A.Y THE COMPANY CLAIMED DEDUCTION U/S 80IB AS A.Y 2001- 02 AND 10 YEARS FROM THE INITIAL A.Y IS 2010-11 I.E. THE YEAR UNDER APPEAL. ACCORDING TO THE ASSESSEE, THE COMMERCIAL PRODUCTIO N STARTED ITA NO.1393 OF 2014 BLEND COLOURS PVT LTD HYDERABAD PAGE 9 OF 11 ONLY ON 12.4.2000 AND THEREFORE, THE FIRST YEAR OF CLAIMING 80IB DEDUCTION IS A.Y 2001-02. ON THE OTHER HAND, ACCORD ING TO THE AO, SINCE OPERATIONS WERE COMMENCED ON 6.3.1999, TH E FIRST YEAR AFTER CLAIMING DEDUCTION UNDER 80IB WOULD BE 1999-2 000 AND THE PERIOD OF 10 YEAR WOULD END IN A.Y 2008-09 AND HENCE NO CLAIM CAN BE MADE IN THE A.Y 2010-11. THIS ISSUE HA S TO BE ADDRESSED AND WE FIND THAT FROM THE PERUSAL OF THE RECORD THAT ONLY THE TRIAL PRODUCTION HAS STARTED ON 6.3.99 AND COMMERCIAL PRODUCTION HAS STARTED ONLY FROM 12.4.2000. IN SUPP ORT OF THE CLAIM THE ASSESSEE HAS PRODUCED THE FOLLOWING: (A) LETTER DATED 15.07.1999 ADDRESSED TO THE GENER AL MANAGER, DISTRICT INDUSTRIES CENTRE, BALANAGAR, HYD ERABAD, WHEREIN THE ASSESSEE INTIMATED AS UNDER: THIS IS TO INFORM YOU THAT THE TRIAL PRODUCTION OF OUR PRODUCTS (PLASTIC MASTER BATCHES, COMPOUNDS & FILLER) IS NOT YET SUCCESSFUL, BECAUSE OF SERIES PROBLEM IN MACHINERY THERE BY EFF ECTING THE QUALITY OF PRODUCT. NOTE THAT WE HAVE NOT YET START ED COMMERCIAL PRODUCTION. HENCE WE REQUEST YOU TO DEFER THE DATE OF COMMERCI AL PRODUCTION FOR SALES TAX EXEMPTION AS WILL INTIMATE YOU THE DATE OF COMMENCEMENT OF COMMERCIAL PRODUCTION ONCE WE ARE R EADY (B) LETTER DATED 08.05.2000 ADDRESSED TO GENERAL MANAGER, DISTRICT INDUSTRIES CENTRE, BALANAGAR, HYD ERABAD IT WAS STATED AS UNDER: THIS IS TO INFORM YOU THAT WE HEREBY INFORM YOU THA T THE COMMERCIAL PRODUCTION HAS STARTED AFTER SUCCESSFUL MACHINE. WITH REFERENCE OUR LETTER DATED 15.07.99 WE ARE PLEASED TO INFORM ABOUT THE SUCCESS TRIAL PRODUCTION. ITA NO.1393 OF 2014 BLEND COLOURS PVT LTD HYDERABAD PAGE 10 OF 11 WE HAVE NOW STARTED COMMERCIAL PRODUCTION SINCE 12.4.2000 AND ACCORDINGLY WE WILL CLAIM SALES TAX E XEMPTION VIDE YOUR FINAL ELIGIBILITY LETTER DATED 11.6.1999. (C) COMMISSIONER INDUSTRIES A.P. VIDE LETTER DATED 24.06.2002 COMMUNICATED TO THE ASSESSEE AS UNDER: WITH REFERENCE TO THE CLAIM APPLICATION FILED BY Y OU VIDE REFERENCE 3 RD CITED, I AM ENCLOSING HEREWITH THE FINAL ELIGIBILI TY CERTIFICATE FIXING UP ELIGIBILITY FOR SALES TAX DEF ERMENT ISSUED IN FILE BEARING NO.10/2/12/1073. TEMPORARY ELIGIBILITY FOR SALES TAX CONCESSION OBT AINED EARLIER FROM THE GENERAL MANAGER, DISTRICT INDUSTRI ES CENTRE CONCERNED, IF ANY, IS TO BE TREATED AS PART OF THE FINAL ELIGIBILITY. (D) THE COMMISSIONER INDUSTRIES GOVT. OF A.P. HAS I SSUED FINAL ELIGIBILITY CERTIFICATE FOR CLAIMING SALES TAX DEFE RMENT VIDE LETTER DATED 24.6.2002 WHEREIN THE DATE OF COMMENCEMENT OF COMMERCIAL PRODUCTION WAS MENTIONED AS 09.01.2002. 15. FURTHER IN THE COMPUTATION OF TOTAL INCOME THE DEDUCTION U/S 80IB WAS MADE AND THE AO ACCEPTED THE SAME U/S 143(3). INADVERTENTLY IN THE E-FILED RETURN, CHAPTER VI-A D EDUCTION WAS SHOWN AS NIL. TO CLEAR THIS DEFECT, REVISED RETURN WAS FILED. IN THESE CIRCUMSTANCES, THE CLAIM WAS MADE IN THE ORIG INAL ASSESSMENT AND HENCE WE HOLD THAT ASSESSEE IS ELIGI BLE FOR 80IB DEDUCTION. 16. WE ARE OF THE OPINION THAT THE ASSESSEE IS ELIG IBLE FOR DEDUCTION FROM THE STARTING OF COMMERCIAL PRODUCTIO N AND FOR THIS VIEW, WE RELY ON THE DECISION OF CIT VS. HINDU STAN ANTIBIOTICS LTD (93 ITR 548). THE FIRST YEAR OF CLA IMING 80IB DEDUCTION IS A.Y 2001-02. WE ARE IN CONFIRMITY OF T HE ORDER OF ITA NO.1393 OF 2014 BLEND COLOURS PVT LTD HYDERABAD PAGE 11 OF 11 THE CIT (A) AND WE DISMISS THE DEPARTMENTAL APPEAL ON THIS ISSUE. WE ALSO ADD THAT GROUND NO.3 RAISED BY THE D EPARTMENT IS OF NO RELEVANCE AND IS TO BE OMITTED. 17. IN THE RESULT REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH FEBRUARY, 2015. S D/ - S D/ - (P.M. JAGTAP) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 6 TH FEBRUARY, 2015. VNODAN/SPS COPY TO: 1. DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(3), 4 TH FLOOR, AAYAKAR BHAVAN, HYDERABAD 2. M/S. BLEND COLOURS PVT. LTD. PLOT NO.35, IDA KATTED AN, HYDERABAD 3. THE CIT(A)-II HYDERABAD 4. THE CIT HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE BY ORDER