The ACIT,Mehsana Circle, Mehsana V. M/s. Olympic Laminates Pvt.Ltd., Gandhinagar

ITA 1841/AHD/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0548 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-02-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 21-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADIP KR MAJUMDAR
• Assessee Lawyers: GAURAV MEHTA
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD A BENCH BEFORE: SHRI D.K. TYAGI JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCO UNTANT MEMBER ACIT, MEHSANA CIRCLE, MEHSANA (APPELLANT) VS. M/S OLYMPIC LAMINATES PVT. LTD. BLOCK NO. 49-50, VILLAGE: KAROLI, KALOL, GANDHINAGAR PA NO.AACO3029Q (RESPONDENT) REVENUE BY : SRI PRADIP KR. MAJUMDAR, SR. D.R. ASSESSEE BY : SRI GAURAV MEHTA, A.R. DATE OF HEARING : 14-02-2013 DATE OF PRONOUNCEMENT : 28-02-2013 / ORDER PER : D.K TYAGI, JUDICIAL MEMBER:- THIS IS THE REVENUES APPEAL AGAINST THE ORDER OF L D. CIT(A) GANDHINAGAR DATED 29/04/2011. 2. THE REVENUE HAS TAKEN FOLLOWING TWO EFFECTIVE GR OUNDS:- ITA NO. 1841/2011 A.Y.:-2008-09 ITA NO. 1841/AHD/2011 A.Y. 2008-09 PAGE NO ACIT VS. OLYMPIC LAMINATES PVT. LTD. 2 (1) THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FAC TS IN DELETING THE ADDITION OF RS. 1,45,22,472/-, MADE ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S 80IB OF THE I.T. ACT, 1961. (2) THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION OF RS. 85,263/-, MADE ON ACCOUNT OF DI FFERENCE IN INTEREST. 3. GROUND NO. 1 RELATES TO CLAIM OF THE ASSESSEE FO R DEDUCTION U/S 80IB(3) OF THE ACT. THE ASSESSING OFFICER DURING T HE ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE-COMPANY HAD INVESTED IN PLANT AND MACHINERY MORE THAN RS. 3 CRORE. AS ASSESSEE HAD NOT FULFILL ED THE CONDITION, THEREFORE, ASSESSEE WAS NOT ENTITLED FOR DEDUCTION U/S 80IB FO R SMALL SCALE INDUSTRIAL UNDERTAKINGS AND THE CLAIM U/S 80IB OF THE ACT WAS REJECTED BY HIM. LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO GIVE DEDUC TION U/S 80IB BY OBSERVING AS UNDER:- 9.2 I HAVE CONSIDERED SUBMISSIONS OF THE APPELLANT COMPANY, ASSESSMENT ORDER, FACTS OF THE CASE AND EVIDENCES F URNISHED BY THE APPELLANT COMPANY. THE FOLLOWING IMPORTANT OBSERVAT ION RELATED TO SMALL SCALE INDUSTRY AND CLAIM U/S. 80-IB ARE MADE : (I) THE APPELLANT COMPANY HAS GOT PROVISIONAL REGISTRATION AS SMALL SCALE INDUSTRIAL UNDERTAKING FROM DIRECTOR OF INDUSTRIES, GOVT. OF GUJARAT, GANDHINAGAR ON 23/07/1999. AS PER PRESS NOTE NO. 4, THE MINISTRY OF COMMERCE AND INDUSTRIES, VIDE CIRCULAR F.NO. 10(6) / 97 - IP (VOL. ILL) DATE D 14/03/2000 CLARIFIED THAT 'THE UNITS WHICH HAVE OBTAINED PROVI SIONAL REGISTRATION ON THE BASIS OF THE NOTIFICATION DATED 10 TH DECEMBER, 1997 AND HAVE TAKEN CONCRETE STEPS FOR IMPLEMENTING THE PROJECT SUCH IS PREPARATION OF PRO JECT REPORT, SANCTION OF LOAN, PURCHASE OF LAND, CIVIL CONSTRUCT ION, PLACEMENT OF ORDERS FOR PLANT & MACHINERY ETC, PRIO R TO 24 TH DECEMBER, 1999 WOULD CONTINUE TO ENJOY THE SSI STAT US SO LONG AS THE INVESTMENT IN PLANT & MACHINERY DOES NOT EXC EEDS RS. 300 LACS, NOTWITHSTANDING THE REVISED INVESTMENT LI MIT OF RS. ITA NO. 1841/AHD/2011 A.Y. 2008-09 PAGE NO ACIT VS. OLYMPIC LAMINATES PVT. LTD. 3 100 LACS NOTIFIED ON 24 TH DECEMBER, 1999. IT WAS GRANTED PERMANENT SMALL SCALE REGISTRATION VIDE ORDER DATED 12/04/2001 UNDER SECTION 11B OF THE INDUSTRIES (DEVELOPMENT AN D REGULATION) ACT, 1951. THE REGISTRATION CONTINUED I N SUBSEQUENT YEARS. (II) THE ISSUE WAS CONSIDERED IN DETAIL IN T HE CASE FOR A,Y. 2006-07 IN APPEAL NO, CIT(A)GNR/212 /2010-11 DATED 27/04/2011. THE COMPANY HAS BEEN HELD TO BE ELIGIBL E FOR DEDUCTION U/S. 80-IB, HOLDING THAT THE COMPANY WAS SSI IN THAT YEAR, ALTHOUGH THE INVESTMENT IN PLANT AN MACHINERY AT RS. 1,28,49,101/- EXCEEDED RS. 1 CRORE. (III) THE LIMIT FOR INVESTMENT IN PLANT AND MA CHINERY FOR SMALL SCALE INDUSTRIES WERE INCREASED TO RS. 5 CROR ES W.E.F, 02/10/2006 BY CENTRAL GOVT. AS PER CIRCULAR DATED 2 6-10-2006 NO. UC/LU/5MEACT/ 5560 TO 5599 OF DIRECTOR OF INDUS TRIES, GANDHINAGAR. (IV) THE APPELLANT COMPANY HAS FURNISHED WORKIN G OF INVESTMENT IN PLANT AND MACHINERIES AS PER NOTIFICA TION ALONG WITH AUDIT REPORT FOR CLAIM OF DEDUCTION U/S. 80-IB (3) (II) IN FORM NO. 10CCB, DULY CERTIFIED BY AUDITORS. THE INV ESTMENT IN ELIGIBLE PLANT AND MACHINERIES IS OF RS. 3,20,87,2 50/-, WHICH IS WITHIN THE LIMITS I.E. DOES NOT EXCEEDS RS, 5 CRORE S AS PER PROVISIONS OF 11B OF THE INDUSTRIES (DEVELOPMENT & REGULATION) ACT 1951 APPLICABLE TO THE APPELLANT COMPANY AS SMA LL SCALE INDUSTRIES; AS PROVIDED IN MICRO, SMALL & MEDIUM EN TERPRISE DEVELOPMENT ACT, 2006. (V) THE DISTRICT INDUSTRIES CENTER, GANDHINAGAR ISSUED CERTIFICATE ON 31/07/2007 TO THE APPELLANT COMPANY IS SMALL SCALE INDUSTRIAL UNDERTAKING HOLDING ENTREPRENEUR MEMORANDUM NUMBER 24-006-12-00344 FOR MANUFACTURE O F DECORATIVE LAMINATED SHEETS / INDUSTRIAL LAMINATED SHEETS. 9.3 HAVING CONSIDERED THE ABOVE, I AM OF THE OPINI ON THAT FOR THE YEAR CONSIDERATION, THE LIMIT OF INVESTMENT IN PLAN T & MACHINERY TO SSI UNITS IS OF RS, 5 CRORES AND NOT OF RS, 1 CRORE PER PROVISIONS OF ITA NO. 1841/AHD/2011 A.Y. 2008-09 PAGE NO ACIT VS. OLYMPIC LAMINATES PVT. LTD. 4 11B OF THE INDUSTRIES (DEVELOPMENT & REGULATION) AC T 1951 APPLICABLE TO THE APPELLANT COMPANY AS SMALL SCALE INDUSTRIES, AS PROVIDED IN MICRO, SMALL & MEDIUM ENTERPRISE DEVELO PMENT ACT, 2006. AFTER CONSIDERING THE NOTIFIED EXCLUDABLES TH E COMPUTATION OF ELIGIBLE PLANT AND MACHINERY AS ON 31/03/2008 IS OF RS. 3,20,87,250/- WHICH IS BELOW THE LIMIT OF RS. 5 CRORES. THEREFOR E THE APPELLANT COMPANY FULFILLS THE CONDITIONS OF SSI DURING THE A SST. YEAR 2008-09. ACCORDINGLY, ON A CONSIDERATION OF THE FACTS ON REC ORDS, THE CONTENTIONS MADE BY THE APPELLANT COMPANY, I AM OF THE OPINION THAT THE APPELLANT COMPANY FULFILLS THE CONDITIONS OF SSI DURING THE ASST. YEAR 2008-09, AND THEREFORE ENTITLED TO DEDUC TION U/S 80-IB OF THE I.T. ACT. THE ASSESSING OFFICER IS DIRECTED TO GIVE DEDUCTION U/S. 80-IB OF RS. 1,45,24,472/- 4. SINCE THERE IS NO DISPUTE ABOUT THE FACT THAT LIMIT OF INVESTMENT IN PLANT AND MACHINERY TO SSI UNIT IS OF RS. 5 CRORES AND NOT RS. 1 CRORE AS PER PROVISIONS OF 11B OF INDUSTRIES (DEVELOPMENT AND RE GULATION) ACT, 1951 APPLICABLE TO THE ASSESSEE-COMPANY AS SMALL SCALE I NDUSTRIES AS PROVIDED IN MICRO TO THE SMALL AND MEDIUM ENTERPRISES DEVELOPME NT ACT, 2006 AND ASSESSEES INVESTMENT IN PLANT AND MACHINERY BEING OF RS. 3,20,87,250/- AS ON 31.03.2008 WHICH IS BELOW THE LIMIT OF RS. 5 CRO RES, WE FEEL NO NEED TO INTERFERE WITH THE ORDER IN HOLDING THAT ASSESSEE W AS ENTITLED FOR DEDUCTION U/S 80IB OF THE ACT AND THE ORDER PASSED BY HIM IN THIS RESPECT IS HEREBY UPHELD. THIS GROUND OF THE REVENUE IS DISMISSED. 5. GROUND NO. 2 RELATES TO ADDITION OF RS. 85,263/- . THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS ON THE BA SIS OF AIR INFORMATION OBSERVED THAT THE ASSESSEE HAD RECEIVED INTEREST OF RS. 2,47,659/- WHILE HE HAS SHOWN INTEREST OF RS. 1,62,396/- IN THE RETURN OF INCOME. THUS, THE DIFFERENCE OF RS. 85,263/- NOT SHOWN BY ASSESSEE-CO MPANY WAS ADDED IN THE TOTAL INCOME OF THE ASSESSEE. ITA NO. 1841/AHD/2011 A.Y. 2008-09 PAGE NO ACIT VS. OLYMPIC LAMINATES PVT. LTD. 5 6. IN APPEAL, LD. CIT(A) DELETED THIS ADDITION BY O BSERVING AS UNDER:- 10.2 I HAVE CONSIDERED SUBMISSIONS OF THE APPELLAN T COMPANY, FACTS OF THE CASE AND EVIDENCES FURNISHED BY THE APPELLAN T COMPANY, FOLLOWING IMPORTANT FACTS EMERGES: (I) AS PER AIR INFORMATION THE TOTAL OF INTERE ST COMES TO RS, 2 , 47,659/-, WHICH INCLUDES INTEREST FROM UTTAR GUJARA T VIJ CO. LTD. OF RS. 45,848/- AND INTEREST FROM PUNJAB NATIO NAL BANK, AMBAWADI BRANCH OF RS, 2,01,811/-. (II) AS PER TDS CERTIFICATE, THE INTEREST FROM UTTA R GUJARAT VIJ CO. LTD. IS OF RS. 45,848/- AND INTEREST FROM P UNJAB NATIONAL BANK, AMBAWADI BRANCH IS OF RS. 1,40,360/- . (III) THE APPELLANT HAS COLLECTED DETAILS OF FO R INTEREST AND TDS FROM PUNJAB NATIONAL BANK, THE DETAILS SHOWS TH AT THE FDR INTEREST IS OF RS. 1,40,360/- AND TDS IS OF RS. 28,915/-. (IV) DURING THE YEAR THE APPELLANT HAS ACCOUNTE D / PROVIDED FDR INTEREST AT RS. 1,16,548/-. THE ASSESSEE HAD AC COUNTED THE REMAINING INTEREST OF RS, 24,774/-, ACCRUED IN LAST YEAR AND DISCLOSED THERE ON ACCRUAL BASIS. THUS, THE FDR INT EREST DISCLOSED TILL THE END OF THE YEAR OF RS, I , 41,322/-, WHICH IS MORE THAN FDR INTEREST AS PER TDS CERTIFICATE AND DETAIL S PROVIDED BY PNB. 9.3 HAVING CONSIDERED THE ABOVE, I AM OF THE OPINIO N THAT THE APPELLANT HAS PROPERLY RECORDED INTEREST INCOME AS PER TDS CERTIFICATES FROM UTTAR GUJARAT VIJ CO, LTD. AND PU NJAB NATIONAL BANK, DETAILS OF PUNJAB NATIONAL BANK ALSO SHOWS TH AT THE FDR INTEREST IS OF RS. 1,40,36O/- ONLY AND NOT RS. 2,01 ,811/- AS SHOWN IN AIR INFORMATION / IN FORM NO. 26AS, THE DIFFERENCE OF RS. 61,451/- IS WRONG UPLOADING OF DATA BY PNB. THE REMAINING AMOUN T OF ADDITION OF RS, 23,812/- IS ON ACCOUNTING OF FDR INTEREST IN COME IN LAST YEAR ON ACCRUAL BASIS, WHICH IS PAID/CREDITED BY BANK DU RING THE YEAR. ACCORDINGLY, ON A CONSIDERATION OF THE FACTS ON REC ORDS, TDS CERTIFICATES AND OTHER DETAILS, THE CONTENTIONS MAD E BY THE APPELLANT ITA NO. 1841/AHD/2011 A.Y. 2008-09 PAGE NO ACIT VS. OLYMPIC LAMINATES PVT. LTD. 6 COMPANY, I AM OF THE OPINION THAT THE APPELLANT COM PANY HAS ACCOUNTED CORRECT INTEREST INCOME AS PER MERCANTILE ACCOUNTING SYSTEM FOLLOWED AND AS CERTIFIED BY THE PAYERS IN T DS CERTIFICATES. THE ASSESSING OFFICER IS DIRECTED TO GIVE RELIEF OF DIFFERENCE OF INTEREST OF RS. 85,263/- ADDED ON THE BASIS OF AIR INFORMATION. 7. SINCE THE ABOVE FINDING OF THE LD. CIT(A) REMAIN ED UNDISPUTED BY THE REVENUE AT THE TIME OF HEARING, WE FEEL NO NEED TO INTERFERE WITH THE ORDER PASSED BY HIM AND THE SAME IS HEREBY UPHELD. THIS GROUND OF THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (ANIL CHATURVEDI) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 28/02/2013 A.K. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '#