The ACIT, Vapi Circle, Vapi V. M/s. Janki Plastics, Nani Daman

ITA 1893/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76738 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-05-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 29-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Section: 80IB

Judgement Text

, , , , B, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH . .. . . .. . , !' !' !' !', , , , #$ #$ #$ #$ # ## #. .. .# ## #. . . . % % % %, , , , &' ( & ' &' ( & ' &' ( & ' &' ( & ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND N.S. SAINI, ACCOUNTANT MEMBER) ITA NO.1893/AHD/2011 [ASSTT.YEAR : 2007-2008] ACIT, VAPI CIRCLE VAPI. /VS. M/S.JANKI PLASTICS S.NO.376/2(12), BLDG. NO.2 RUNGTA INDUSTRIAL ESTATE NANI DAMAN. ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) ( . / &/ REVENUE BY : SHRI P.L. KUREEL, SR.DR 12 . / &/ ASSESSEE BY : NONE 3 . 24'/ DATE OF HEARING : 21 ST MAY, 2014 567 . 24'/ DATE OF PRONOUNCEMENT : 06-06-2014 &8 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 2007-2008 IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A). 2. AT THE TIME OF HEARING, NONE APPEARING ON BEHALF OF THE ASSESEE- RESPONDENT, AND ACCORDINGLY, THE APPEAL OF THE REVE NUE IS BEING DECIDED EX PARTE QUA THE ASSESSEE-RESPONDENT, ON MERITS AFTER HEARING L EARNED DR. 3. THE ONLY GROUND OF THE APPEAL OF THE REVENUE IS AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD.CIT(A) HAS ERRED IN HOLDING THAT THE INCOME FROM SCRAP SALES OF ITA NO.1893/AHD/2011 -2- RS.20,18,911/- IS ELIGIBLE FOR DEDUCTION U/S.80IB W ITHOUT CONSIDERING FACT THAT IT HAS NO DIRECT OR IMMEDIATE NEXUS WITH THE MANUFACTURING ACTIVITY OF THE ASSESSEE. 4. THE LEARNED DR SUBMITTED THAT SALE OF SCRAP WAS NOT RELATABLE TO THE MANUFACTURING ACTIVITY OF THE ASSESSEE, AND THEREFO RE, DEDUCTION UNDER SECTION 80IB WAS RIGHTLY DENIED BY THE AO. HE RE FERRED TO RELEVANT PORTIONS OF THE ASSESSMENT ORDER IN SUPPORT OF THE CASE OF THE REVENUE. HE RELIED ON THE ORDER OF THE AO. 5. WE HAVE CONSIDERED SUBMISSIONS OF THE LEARNED DR AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DE CISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF HARJIVANDA S JHUTHABHAI ZAVERI AND ANOTHER, 258 ITR 785 (GUJ). THE CIT(A) HAS OBSERVE D THAT THE HONBLE GUJARAT HIGH COURT IN THIS CASE HAS HELD THAT SCRAP SALES IS AN INCOME DERIVED FROM INDUSTRIAL UNDERTAKING. WE FIND THAT THERE IS NO MATERIAL BEFORE US TO SUGGEST THAT THE SCRAP WAS ON ACCOUNT OF OLD MACHINERY, WHICH HAS BECOME OBSOLETE AND WHICH HAS BEEN SOLD BY THE ASSESSEE. IF THE SCRAP IS ON ACCOUNT OF UNUSABLE MATERIAL, THE SAME DOES F ORM PART OF THE MANUFACTURING INCOME OF THE ASSESSEE. IN THESE FAC TS OF THE CASE, FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONA L HIGH COURT, WE HOLD THAT THERE IS NO MISTAKE IN THE ORDER OF THE CIT(A) IN DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE, AND ACCORDINGLY, THE GROUND OF THE APPEAL OF THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( # ## #. .. .# ## #. . . . % % % % /N.S.SAINI) &' ( &' ( &' ( &' ( /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT