The ACIT,Vapi Circle, Vapi V. Apple Insulated Wires Pvt.Ltd., SILVASSA

ITA 1869/AHD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6923 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-04-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 31-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K TOPIWALA
• Keywords: Business income
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI D.K.TYAGI, HONBLE JUDICIAL MEMBER, AND SHRI D. C. AGRAWAL, HONBLE ACCOUNTANT MEMBER ITA NO.1869/AHD/2010 & C.O. NO.221/AHD/2010 ASSESSMENT YEAR:2007-08 DATE OF HEARING:1..4.11 DRAFTED:4.4.11 ASSISTANT COMMISSIONER OF INCOME-TAX, VAPI CIRCLE, VAPI APPLE INSULATED WIRES PVT. LTD. NR. DADRA CHECK POST, DADRA, SILVASSA (U.T. OF D.N.H) PAN NO. AACCA2735K V/S . V/S . APPLE INSULATED WIRES PVT. LTD. NR. DADRA CHECK POST DADRA, SILVASSA (U.T. OF D.N.H.) ASSISTANT COMMISSIONER OF INCOME-TAX, VAPI CIRCLE, VAPI (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI R.K. TOPIWALA, DR RESPONDENT BY:- NONE O R D E R PER D.K.TYAGI, JUDICIAL MEMBER:- THIS IS REVENUES APPEAL AGAINST THE ORDER OF COMM ISSIONER OF INCOME- TAX(APPEALS), VALSAD IN APPEAL NO. CIT(A)/VLS/229/0 9-10 DATED 25-02-2010 FOR THE ASSESSMENT YEAR 2007-08. 2. THE BRIEF FACTS ARE THAT ASSESSEE-FIRM IS ENGAGE D IN THE BUSINESS OF MANUFACTURING OF VARIOUS COPPER BASED INSULATED WIR ES. THE MANUFACTURING UNIT IS ELIGIBLE FOR DEDUCTION U/S.80IB OF THE I.T. ACT, 1961. THE ASSESSING ITA NO.1869/AHD/2010 & CO 221/AHD/2010 A.Y. 2007-08 ACIT VAPI CIRL V. APPLE INSULATED WIRES P. LTD. PAGE 2 OFFICER DURING THE ASSESSMENT PROCEEDINGS FOUND THA T BUSINESS INCOME WORKED OUT FOR AVAILING BENEFITS U/S.80IB WAS INCLU SIVE OF THE SCRAP SALE INCOME OF RS.1,21,31,470/-. THE ASSESSEE WAS ASKED TO EXPLAIN THE ELIGIBILITY FOR DEDUCTION AS ACCORDING TO HIM, INCOME WAS NOT D ERIVED FROM THEIR MANUFACTURING ACTIVITY. THE ASSESSEE THROUGH ITS WR ITTEN SUBMISSION EXPLAINED THAT THE INCOME IS GENERATED OUT OF MANUFACTURING A CTIVITY AND IT SHOULD BE ALLOWED AS SUCH. THE EXPLANATION OF THE ASSESSEE WA S NOT ACCEPTED BY ASSESSING OFFICER AND HE HELD THAT PROFIT FROM THE SALE OF SCRAP CANNOT BE HELD AS MANUFACTURING PROFIT. HE ACCORDINGLY DISALLOWED THE CLAIM OF DEDUCTION ON THE INCOME OF SCRAP SALES. IN APPEAL, LD. CIT(APPEA LS) FOLLOWING THE JURISDICTIONAL HIGH COURTS DECISION IN THE CASE OF DCIT V. HARJIVANDAS JHUTHABHAI ZAVERI AND ANOTHER (2002) 258 ITR 785 (GUJ), WHEREIN IT WAS HELD THAT SCRAP SALE IS AN INCOME DERIVED FROM INDUSTRIA L UNDERTAKING ACTIVITY, ALLOWED THE APPEAL OF ASSESSEE TREATING THE SCRAP S ALE AS INCOME AND THEREFORE ELIGIBLE FOR THE BENEFIT OF DEDUCTION U/S 80IB OF THE ACT. SINCE THE LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE BY FOLLOWIN G THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF HARJIVANDAS JHUTHABHAI ZAVERI AND ANOTHER (SUPRA) WE FIND NO INFIRMITY IN THE ORDER PASSED B Y LD. CIT(A) AND THE SAME IS HEREBY UPHELD. THIS GROUND OF REVENUES APP EAL IS DISMISSED. NOW COMING TO ASSESSEES CO NO.221/AHD/2010. 3. THE CROSS OBJECTION HAS BEEN FILED BY ASSESSEE I N SUPPORT OF LD. CIT(A)S ORDER. IN VIEW OF OUR DECISION IN REVENUE S APPEAL THE CO OF ASSESSEE HAS BECOME INFRUCTUOUS AND SAME IS DISMISS ED AS INFRUCTUOUS. 4. IN THE RESULT, REVENUES APPEAL AND THAT OF ASSESSE ES CO ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 08/04/2011 SD/- SD/- (D.C.AGRAWAL) (D.K. TYA GI) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 08/04/2011 ITA NO.1869/AHD/2010 & CO 221/AHD/2010 A.Y. 2007-08 ACIT VAPI CIRL V. APPLE INSULATED WIRES P. LTD. PAGE 3 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-VSL 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD