R. Mananathan, Pondicherry V. ACIT, Pondicherry

ITA 2061/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73742 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 26-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: JHARNA B HARILAL
• Keywords: Wrong claim
• Section: 143(3); 80IB; 147

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , !' # , $ % BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./I.T.A.NO. 2061/MDS/2013 ( / ASSESSMENT YEAR : 2005-06) MR. R.MANANATHAN, PROP.OF M/S.MANATEC ELECTRONICS PLOT NO.7 & 8 AIRPORT ROAD, PONDICHERRY VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-I, PONDICHERRY. PAN:AEVPM9248R ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MS. JHARNA B.HARILAL, C.A /RESPONDENT BY : MR. N.MADHAVAN, JCIT / DATE OF HEARING : 13 TH FEBRUARY, 2014 ! /DATE OF PRONOUNCEMENT : 7 TH MARCH, 2014 & / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VI, CHENNA I DATED 28.10.2013 FOR THE ASSESSMENT YEAR 2005-06. T HE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS THAT TH E COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DISAL LOWING THE CLAIM OF THE ASSESSEE UNDER SECTION 80-IB OF TH E ACT. THE ITA NO.2061/MDS/2013 2 CONTENTION OF THE ASSESSEE WAS THAT HIS CLAIM IS EL IGIBLE FOR DEDUCTION UNDER SECTION 80IB(4) OF THE ACT, THOUGH BY MISTAKE THE CLAIM WAS MADE UNDER SECTION 80-IB(5) IN FORM NO.10CCB. 2. BRIEF FACTS ARE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING, TRADING AND SERVICING OF AUTOMOBI LE GARAGE EQUIPMENTS FILED HIS RETURN OF INCOME ON 26.10.2005 DECLARING INCOME OF ` 30,21,090/-. THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80-IB OF THE ACT AS FIFTH YEAR OF IT S CLAIM ON THE PROFITS DERIVED FROM MANUFACTURE OF GARAGE EQUIPMEN TS. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF TH E ACT ACCEPTING THE CLAIM OF THE ASSESSEE. LATER, ASSESSM ENT WAS REOPENED UNDER SECTION 147 ON THE GROUND THAT ASSES SEE IS NOT ENTITLED TO CLAIM DEDUCTION UNDER SECTION 80IB BEING SMALL SCALE INDUSTRIAL UNIT. IN THE COURSE OF RE-ASSESSM ENT PROCEEDINGS UNDER SECTION 147, THE ASSESSEE CONTEND ED BEFORE THE ASSESSING OFFICER THAT HIS CLAIM IS ELIG IBLE FOR DEDUCTION UNDER SECTION 80-IB(4) THOUGH ASSESSEE H AS WRONGLY MENTIONED IN THE FORM NO.10CCB FILED ALONG WITH THE ITA NO.2061/MDS/2013 3 RETURN OF INCOME THAT HIS CLAIM IS ELIGIBLE UNDER S ECTION 80IB(5) OF THE ACT. HOWEVER, ASSESSING OFFICER COMP LETED THE ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 1 47 OF THE ACT BY ORDER DATED 10.01.2013 REJECTING THE CLAIM O F THE ASSESSEE THAT ASSESSEE IS NOT ENTITLED FOR DEDUCTIO N UNDER SECTION 80IB(3) AS IT IS NOT A SSI UNDERTAKING. THE ASSESSING OFFICER WAS OF THE VIEW THAT PROVISIONS OF SECTION 80IB(3) ARE NOT APPLICABLE TO THE ASSESSEE AS THE ASSESSEE DID NOT SATISFY CONDITIONS OF SSI BEING SMALL SCALE INDUSTRIAL UNDE RTAKING. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) SUSTAI NED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 3. THE COUNSEL FOR THE ASSESSEE SUBMITS THAT ASSESS EES INDUSTRIAL UNDERTAKING IS SET UP IN PONDICHERRY WHI CH IS AN INDUSTRIALLY BACKWARD AREA NOTIFIED IN EIGHTH SCHED ULE. THE COUNSEL SUBMITS THAT ASSESSEE CLAIMED DEDUCTION UND ER SECTION 80IB(5) IN FORM NO.10CCB FILED ALONG WITH THE RETURN OF INCOME AND THIS CLAIM WAS INADVERTENTLY MADE BY THE ASSESSEE MENTIONING SUB-SECTION AS (5) INSTEAD OF S UB- SECTION (4). THE COUNSEL SUBMITS THAT FOR CLAIMING DEDUCTION ITA NO.2061/MDS/2013 4 UNDER SECTION 80IB(4) ASSESSEES UNDERTAKING NEED N OT BE A SSI UNDERTAKING. THE ASSESSING OFFICER HOWEVER TREA TED THE CLAIM OF THE ASSESSEE UNDER SUB-SECTION (3) WHICH IS APPLICABLE TO SSIS AND REJECTED THE CLAIM OF THE AS SESSEE WITHOUT GOING INTO SUBMISSIONS OF THE ASSESSEE THAT HIS UNDERTAKING IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(4) OF THE ACT. THE COUNSEL SUBMITS THAT COMMISSIONER OF I NCOME TAX (APPEALS) IS NOT JUSTIFIED IN SUSTAINING THE DI SALLOWANCE MERELY BECAUSE ASSESSEE HAS MENTIONED THAT HE IS CL AIMING DEDUCTION UNDER SUB-SECTION (5) OF SECTION 80IB INS TEAD OF SUB-SECTION (4) OF SECTION 80IB OF THE ACT. THE COU NSEL FOR THE ASSESSEE FURTHER SUBMITS THAT CO-ORDINATE BENCH OF THIS TRIBUNAL IN ITA NO.1955/MDS/2012 & C.O.NO.203/MDS/2 012 BY ORDER DATED 28.01.2013 HAD IN FACT CONSIDERED S IMILAR ISSUE AS TO WHETHER ASSESSEE IS ENTITLED FOR DEDUCT ION UNDER SECTION 80IB(5) OR NOT AND THE TRIBUNAL DISMISSED T HE APPEAL OF THE REVENUE AFFIRMING THE DECISION OF THE COMMIS SIONER OF INCOME TAX (APPEALS) IN HOLDING THAT ASSESSEE IS EL IGIBLE FOR DEDUCTION UNDER SECTION 80IB(4) OF THE ACT. THEREFO RE, COUNSEL PLEADS BEFORE THE TRIBUNAL THAT THE ABOVE D ECISION OF ITA NO.2061/MDS/2013 5 THE CO-ORDINATE BENCH MAY BE FOLLOWED FOR THE ASSES SMENT YEAR 2005-06 ALSO. 4. DEPARTMENTAL REPRESENTATIVE SUPPORTING THE ORDER S OF LOWER AUTHORITIES IN REJECTING THE CLAIM OF THE ASS ESSEE UNDER SECTION 80IB OF THE ACT. 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES AND DECISION OF THE TRIBUNAL RELIED ON. THE ASSESSI NG OFFICER REOPENED THE ASSESSMENT AND DENIED THE CLAIM OF ASS ESSEE FOR DEDUCTION UNDER SECTION 80IB OF THE ACT ON THE GROUND THAT ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80IB(5) OF THE ACT AND THE ASSESSEE IS NOT A SMALL SCALE INDUSTRIAL UN DERTAKING AS SPECIFIED IN SUB-SECTION (3) OF SECTION 80IB OF THE ACT, IGNORING THE SUBMISSIONS OF THE ASSESSEE THAT UNDER TAKING OF THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTIO N 80IB(4). HOWEVER, THE ASSESSEE MENTIONED THAT IT IS ELIGIBLE FOR DEDUCTION UNDER SUB-SECTION (5) OF SECTION 80IB INS TEAD OF SUB-SECTION(4) IN FORM NO.10CCB FILED ALONG WITH TH E RETURN OF INCOME. THE VIEW OF THE ASSESSING OFFICER WAS A FFIRMED BY ITA NO.2061/MDS/2013 6 THE COMMISSIONER OF INCOME TAX (APPEALS), THOUGH TH E COMMISSIONER STATED THAT ASSESSING OFFICER MISDIREC TED HIMSELF WHILE DISALLOWING DEDUCTION UNDER SECTION 8 0IB(3) AND WHEN SUCH DEDUCTION WAS NOT AT ALL CLAIMED IN THE RETURN FILED BY THE ASSESSEE. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS GONE BY THE CLAIM OF THE ASSESSEE MAD E IN FORM NO.10CCB THAT ASSESSEES CLAIM IS UNDER SECTIO N 80- IB(5) AND NOT UNDER SECTION 80-IB(4). IN OUR CONSID ERED VIEW, THE VIEW TAKEN BY THE COMMISSIONER OF INCOME TAX (A PPEALS) IS NOT JUSTIFIED. THE ASSESSING OFFICER CANNOT DENY CLAIM OF DEDUCTION OF THE ASSESSEE UNDER SECTION 80IB OF TH E ACT ON THE GROUND THAT ASSESSEE HAS MENTIONED THAT IT IS C LAIMING DEDUCTION UNDER SECTION 80-IB(5) OF THE ACT, WHEN T HE ASSESSEE IS OTHERWISE ENTITLED FOR DEDUCTION UNDER SECTION 80IB(4) OF THE ACT, COMPLETELY BRUSHING ASIDE THE SUBMISSION OF THE ASSESSEE THAT IT IS ELIGIBLE FOR DEDUCTION U NDER SECTION 80IB(4) BUT INADVERTENTLY MENTIONED THAT THE CLAIM WAS MADE UNDER SECTION 80IB(5). THE LOWER AUTHORITIES HAVE N EVER EXAMINED WHETHER THE ASSESSEE IS ELIGIBLE FOR DEDUC TION UNDER SECTION 80IB(4) AND WITHOUT EXAMINING THE CLA IM OF THE ITA NO.2061/MDS/2013 7 ASSESSEE THEY HAVE REJECTED STATING THAT ASSESSEE H AS MADE A WRONG CLAIM UNDER SECTION 80IB(5), THUS THE ASSES SEE IS NOT ENTITLED FOR DEDUCTION UNDER SECTION 80IB(4) OF THE ACT. WE FIND THAT THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2009-10 IN ITA NO.1955/MDS/2012 DATED 28.01.2013 HELD THAT ASSESS EE IS ENTITLED FOR DEDUCTION UNDER SECTION 80-IB(4) OF TH E ACT. WHILE HOLDING SO, THE TRIBUNAL OBSERVED AS UNDER:- 7. WE HAVE HEARD THE SUBMISSIONS MADE BY BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. A PERUSAL OF THE ORDER OF ASSESSING OFFICER SHOWS THAT THE CLAIM OF THE ASSESSEE UNDER SECTION 80IB(4) HAS BEEN REJECTED BY THE ASSESSING OFFICER ONLY ON THE GROUND THAT THE ASSESSEE IS NOT SSI AND HAS NOT BEEN ABLE TO ESTABLISH THAT PRODUCTS MANUFACTURED BY THE ASSESSEE DO NOT COME UNDER THE ITEMS LISTED IN SCHEDULE III OF THE NOTIFICATION UNDER IDRA ACT. WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS MISINTERPRETED THE PROVISIONS OF LAW. THE CIT(A) IN ITS ORDER HAS CLEARLY GIVEN T HE FACTS OF THE INSTANT CASE AND HAS ALSO SPELT OUT T HE REQUIREMENTS FOR CLAIMING DEDUCTION UNDER SECTION 80IB IN CASE OF AN INDUSTRIAL UNDERTAKING IN AN INDUSTRIALLY BACKWARD STATE. THE SAME ARE REPRODUCED HEREIN BELOW:- IN THE INSTANT CASE, THE FOLLOWING ARE THE UNDISPU TED FACTS: A) THE ASSESSEES UNIT IS ENGAGED IN MANUFACTURING OF AUTOMOBILE ITA NO.2061/MDS/2013 8 GARAGE EQUIPMENTS, B) THE ASSESSEE ' S MANUFACTURING UNIT IS LOCATED IN THE STATE OF PONDICHERRY. THE STATE OF PONDICHERRY IS AN 'INDUST RIALLY BACKWARD STATE' (AS INCLUDED IN ST H SCHEDULE AT S1 . NO.16) , C) THE ASSESSEE HAS BEEN REGISTERED AS A 'SMALL SCALE INDUSTRY' (SSI) WITH THE DIRECTOR OF INDUSTRIES AND COMMERCE, PONDICHERRY, BASED ON THE ABOVE FACTS AND THE REQUIREMENTS OF TH E SEC.8O-IB OF THE ACT, LET US EXAMIN E WHETHER THE ASSESSEE IS ELIGIBLE FOR CLAIMING THE DEDUCTION U/S.8O-IB. THE FIRST AND FOREMOST REQUIREMENT IS THE FULFILLME NT OF FOUR CONDITIONS STIPULATED I N SUB-SECTION (2) OF SEC.8O-IB OF THE ACT. THESE CONDITIONS ARE - (I) IT IS NOT FORMED BY SPLITTING UP, OR THE RECON STRUCTION, OF A BUSINESS ALREADY INEXISTENCE (I I ) I T IS NOT FORMED BY THE TRANSFER TO A NEW BUSINESS OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE; (III) I T MANUFACTURES OR PRODUCES ANY ARTICLE OR THING, NOT BEING ANY ARTICLE OR THING SPECIFIED IN THE LIST IN THE ELEVE NTH SCHEDULE, OR OPERATES ONE OR MORE COLD STORAGE PLANT OR PLANTS, IN ANY PART OF INDIA: (IV) IN A CASE WHERE THE INDUSTRIAL UNDERTAKING MAN UFACTURES OR PRODUCES ARTICLES OR THINGS, THE UNDERTAKING EMPLOY S TEN OR MORE WORKERS IN A MANUFACTURING PROCESS CARRIED ON WITH THE AID OF POWER, OR EMPLOYS TWENTY OR MORE WORKERS IN A MANUF ACTURING PROCESS CARRIED ON WITHOUT THE AID OF POWER . THE FULFILLMENT OF THE CONDITIONS MENTIONED AT CLAU SES (I), (II) AND (IV) ABOVE, ARE NOT UNDER DISPUTE. THE ONLY DI SPUTE IS REGARDING THE FULFILLMENT OF CONDITION IN CLAUSE (III) ABOVE , WHEREIN THE ASSESSING OFFICER HELD THAT THE ITEM 'AUTOMOBILE GA RAGE EQUIPMENTS MANUFACTURED BY THE ASSESSEE IS THE THING OR AN ART ICLE SPECIFIED IN SCHEDULE 11 OF THE IT ACT AND HENCE NOT ELIGIBLE FO R DEDUCTION UNDER SECTION 8O-IB. THE ABOVE OBSERVATION OF THE ASSESSING OFFICER THAT THE MANUFACTURER OF THINGS OR A RTICLES SPECIFIED IN 11TH SCHEDULE ARE NOT ELIGIBLE FOR DEDUCTION U/S.8O-IB, IS NOT TOT A LLY CORRECT . AS PER THE CLAUSE (I I I) ABOVE, ONLY THE ASSESSEES WHO MANUFACTURE THINGS/ARTICLES , OTHER THAN THOSE SPECIFIED IN 11TH SCHEDULE, ARE ELIGIBLE FOR DEDUCTION U / S .8 O-IB. HOWEVER, THIS CONDITION IS NOT ABSOLUTE AND TOTAL. THIS CONDITION IS EMBEDDED WITH CERTAIN EXCEPTIONS , AS PROVIDED IN THE PROVISO. THERE IS A PROVISO TO THE CLAUSE ( III) PROVIDED FOR CERTAIN EXCEPTIONS, AS UNDER: PROVISO TO CLAUSE (I I I) OF SUB-SECTION (2) OF SEC.80-IB: PROVIDED THAT THE CONDITION IN THIS CLAUSE SHALL , IN RELATION TO A SMALL SCALE INDUSTRIAL UNDERTAKING OR AN INDUS TRIAL UNDERTAKING REFERRED TO IN SUB-SECTION(4) SHALL . APPLY AS ITA NO.2061/MDS/2013 9 IF THE WORDS 'NOT BEING ANY ARTICLE OR THING SPECIFIED IN THE LIS T IN THE ELEVENTH SCHEDULE ' HAD BEEN OMITTED. ~ TH U S , THERE ARE TWO EXCEPT I ONS TO THE COND I T I ONS LAID DOWN IN CLAUSE (III) ABOVE. O N E E X CE P T I ON IS TH E SMALL SCA L E I NDUSTR I ES ( SSI) AND THE OTHER EXCEPTION IS INDUS T R IA L U N D ERTAK I N G REFERRE D TO IN SUB-SECT I ON ( 4). THE INDUSTRIAL UNDERTAKING REFERRED TO I N SU B-SEC TI O N (4 ) MEANS AN I NDUSTRIAL UNDERTAKING SITUATED IN AN INDUSTRIALLY BACKWARD STATE SPECIF I ED I N TH E EIGHTH SCHEDULE . THUS , IN THE C ASE OF A 'SSI' OR 'INDUSTRIAL UNDERTAKING SITUATED IN AN INDUSTRIALLY BACKWAR D STATE', THE ASSESSEES WILL BE ELIGIBLE FOR DEDUCTION U/S.80-IB EVEN IF THEY ARE M ANUFACTUR I NG ITEM S SPECIFIED IN 11TH SCHEDULE. THIS IS PARTICULARLY SO BECAUSE THE WOR D S ' N O T BEING A N Y ARTICLE OR THING SPECIFIED IN THE LIST IN THE ELEVENTH SCHEDULE ' ARE T O B E OM I T T ED FROM T HE CLAUSE ( III) IF IT WAS A SSI OR INDUSTRIAL UNDERTAKING SITUATED IN AN INDUS T RI A LL Y BAC K WARD STATE , AS PER THE PROVISO TO THE SAID CLAUSE. F U RTHER , IF EI T HER OF THESE TWO ( AND NOT NECESSARILY BOTH) SITUATIONS ARE FULFILLED , I.E . IF IT WA S SSI OR IF LOCATED IN AN INDUS T RIALL Y BACKWARD STATE , THE ASSESSEE IS ELIGIBLE FOR D E DU C TI O N U/S.8 O -IB EVEN ON THE I T EMS ( MANUFACTURED) SPECIFIED IN 11 TH SCHEDULE. T H E A SSESSE E CLAIMED I TS DEDUCTION U/S.8O-IB(4) OF THE ACT , THE PROVISIONS OF WHI CH AR E AS U NDER : SEC.80-IB: (4 ) THE AMOUNT OF DEDUC T ION IN THE CASE OF AN INDUSTRIAL UNDERTAKING IN AN INDUSTRIALLY BACKWARD STATE SPECI FIED IN THE EIGHTH SCHEDULE SHALL BE HUNDRED PER CENT OF THE PROFITS A ND GAINS DERIVED FROM SUCH INDUSTRIAL UNDERTAKING FOR FIVE ASSESSMENT YEA RS BEGINNING WITH THE INIT I AL ASSESSMEN T YEAR AND THEREAFTER TWENTY - FIVE PER CENT (OR THIRTY PE R CENT WHERE THE ASSESSEE IS A COMPANY) OF THE PROFITS AND GA I NS DERIVED FROM SUCH INDUSTRIAL UNDERTAKING NO W , LE T US E X A MINE THE ASSESSEE ' S CASE . THE ASSESSEE'S MANUFACTURING UNIT IS LOCA T E D I N T HE STA T E OF PON D ICHERR Y, WHICH IS AN ' INDUSTRIALLY BACKWARD STATE' AS N OTIF I E D I N 8 T H SCH E DULE ( AT S L . NO. 1 6 ). THERE IS NO DISPUTE REGARDING THIS POSITION . TH ER EFOR E, T H E ASSE S SEE ' S CASE IS CO V ERED B Y THE SECOND LIMB OF PROVISO TO CLAUSE (III) OF SUB -SEC T I ON ( 2 ) OF S E C.8O-IB OF THE ACT. H ENCE , THE WORDS 'NOT BEING ANY ARTICLE OR THING SPECIFIE D I N THE L I S T I N THE ELE V ENTH SCHEDU L E ' STANDS OMITTED FROM THE LANGUAGE OF C L A US E (I I I ) O F T HE A C T . MANUFAC T URIN G OF AN Y ARTICLE OR THING (INCLUDING THOSE SPECIFIED IN 1 1 TH S C H E DULE) I S SUFFICIENT F OR CLA I MING DEDUCTION U/S8O-IB OF THE ACT IN SUCH A CASE . ON T H IS ACCO U NT ALONE , THE INSTANT ASSESSEE , BEING LOCATED IN AN 'INDUSTRIALLY BACK W A RD STATE ' OF P ONDICHERRY , IS E L IGIBLE FOR DEDUCTION U/S.8 O-IB OF THE ACT . T H E D EDUCTI O N U/S . 8O-IB IN THE CASE OF AN INDUSTRIAL UNDERTAKING IN AN I N D USTRI A L L Y BACKW A RD STATE SPECIFIED IN THE EIGHTH SCHEDULE IS GOVERNED BY THE PR OV ISIONS O F SUB-S E C.(4). THE ITA NO.2061/MDS/2013 10 ONL Y REQU I REMENT IN SUCH CASES IS THAT THE INDUSTRIAL UNDER T AKI N G S H OU L D BE L O CA TE D IN AN INDUS TRI A LLY BACKWARD STATE . I T MAKES NO D I F FERE NCE W HE TH ER SUCH UNDER TAK ING IS A SM A LL SCALE INDUSTRY OR NOT . IN OTHER WORDS , ONCE T H E INDUS TR IAL UNDERTAKING IS LOCATED IN AN INDUSTRIALLY BACKWARD STATE, ALL UNITS (W H ET HER SSI OR NON - SSI) ARE EQU A LL Y EL I GIBLE FOR DEDUCTION U / S . 80- IB OF THE ACT . ON T H E O T HER HAND , AL L TH E SMAL L SCALE INDUS T RIES (SSI) CAN ALSO TAKE EXCEPT I ON TO CL A US E (I I I) O F SUB-SEC .( 2) O F SE C .80-IB , I . E. F ROM THE WORDS ' NOT BEING ANY ART I CL E OR TH I NG S P EC I F IE D IN THE LIST I N T H E ELE V ENTH SCHEDULE ' , IF THEY FULFILL ALL THE NORMS PRESC R I BED UND E R THE SS I GU I DEL I NES / INDUSTRIE S ( DEVELOPMENT AND REGULATION) ACT 1 9 5 1 . ONC E TH E REQUIREMENT S OF SSI ARE FULFILLED , THE ASSESSEE FALLS UNDER THE FIRST LIM B OF E X C E P TIO NS OF PRO VI SO T O CLAUSE ( II I) . IN SUCH A CASE , THE ASSESSEE IS ELIGIBLE FOR D EDUC T I ON E V EN IF T HE Y MANUFAC T URE I T EMS SPECI F IED IN 11 TH SCHEDULE. AND THE Y ARE ELIGIB L E FO R DEDUCT I ON I RRESP EC T IV E OF THE L OCA TI ON OF THE UNDERTAKING I.E. WHETHER LO CA TE D IN A N I NDUST R IAL LY BACKWARD STATE OR O T HER STATES . THUS , TH E ASSESSEES WHOSE INDUSTRIAL U N DERTAKINGS ARE RECOGNIZED AS ' SMALL SC A L E I NDU S TRIES' OR 'LOCATED IN AN INDUSTRIALL Y BACKWARD STATE' ARE ELIGIBLE FOR D E DU CT ION U /S. 8 0-IB OF THE A CT , EVEN IF THEY MANUFACTURE 'ARTICLE OR THING SPECIFIE D IN THE LIST IN T H E E L EVEN T H SCHEDU LE' . F URT HE R , A S STATED EARLI E R , THE E X CEPT I ONS SPECIFIED IN THE PROVISO TO CLAUSE (II I ) I.E . B EI NG ' SMA LL SCALE INDUS T R I ES ' OR ' LOCATED IN AN INDUSTRIALLY BACKWARD STATE ' AR E I ND E P ENDENT OF E ACH ORDER . THE ASSESSEE NEED NO T FULFILL BOTH OF THESE TWO CONDITIONS. I F A N Y ONE OF T H E SE TWO REQUIREMENTS IS FULFILLED T HE ASSESSEE IS ELIGIBLE FOR DEDUCTION , I RRESPE CTI V E OF T H E FULFILLMENT OF T HE OTHER CONDIT I ON . THUS , I N T HE I NS T AN T CA S E , TH E ASSESS E E IS LOCATED IN THE STATE OF PONDICHERRY, W H I CH I S I N A N IN DUS T RI A LL Y BACKWAR D S T A T E. THERE IS NO DISPUTE REGARDING THIS. HENCE , T H E ASS ESSE E I S E LIG I B L E FOR DEDUCT I ON UNDER T HE SUB-SECTION (4) OF SEC . 80-IB OF THE ACT , O N A L L T HE ARTICL E/ THINGS ( INCLUDING THOSE MENT I ONED IN 11T H SCHEDULE) MANUFACTURED B Y IT . I N A L S O M A KE NO DIFFERENCE WHETHER THE UNDERTAKING IS A SSI OR NOT . IN FACT, TH E ASSE S SE E C L A IME D DEDUCTION UNDER THE SUB-SECTION ( 4 ) OF SEC . 80-IB OF THE ACT. O NCE , THE INDUSTRIAL U N DERTAK I NG I S L O CA T ED IN AN INDUSTRIALLY BACKWARD STATE THE A SSE SS E E I S ELI GIBLE FOR DED U C TI ON U/S . 80- I B (4) OF THE ACT . IN SUCH A SITUATION T HERE I S NO NE ED T O F U L FILL THE REQU I R E MEN T S OF ' SS I' NA T URE . IF THE ASSESSEE WANTS TO CLAIM D E DUC TI ON U /S . 80-IB OF THE ACT, BEING IN THE NATURE OF 'SSI' (I.E . IF WANTS TO CLAIM E X C E PTION A S PER THE FIRST LIMB OF PROVISO TO CLAUSE ( III)), THEN ONLY THE ASSESSEE HAS TO PROVE T HA T I T I S R E COGNISED A S A S S I AND ALL THE R E LE V ANT CONDITIONS ARE FULFILLED . I N THE I NSTANT CASE, AS THE ASSESSEE'S INDUSTRIAL UNDERTAKI NG IS ITA NO.2061/MDS/2013 11 'LOCATED IN AN I NDUSTR I ALLY BACKWARD STATE' OF PONDICHERRY, THERE IS NO NEED TO FULFILL THE RE QUIREMENTS OF SSI . THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S.80-IB(4) OF THE ACT . IN VIEW OF THE ABOVE , EXAMINATION OF ASSESSEE'S RECOGNITION AS SSI AND THE I F U LFI LLM E NT OF T HE NECESSAR Y CONDITIONS THEREIN IS OF ONLY ACADEMIC SIGNIFICANCE, AS THE F ULF I LLM E NT OR NON - FULFILLMENT OF T HIS REQUIREMENT WILL NOT HAVE ANY ADVERSE IMPACT ON THE E L IG I BILITY OF DEDUCTION UNDER SUB-SECTION (4) OF SEC.80 -IB OF THE ACT . IN VIEW OF THE ABOVE, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION OF RS.1,25, 17, 185/- U/S . 80 - IB OF THE ACT, MORE SPECIFICAL L Y UNDER SUB-SECTION (4) OF SEC.80-IB OF THE ACT. T HEREF O RE TH E ASSESSING OFFICER IS DIRECTED TO GRANT NECESSARY RELIEF TO TH E ASSESSEE IN T H I S RE G ARD. THE ASSESSEE SUCCEEDS IN ITS APPEALS I N THIS REGARD. 8. THE CIT(A) HAS GIVEN WELL-REASONED AND CATEGORIC FINDING WITH RESPECT TO ELIGIBILITY OF TH E ASSESSEE FOR CLAIMING DEDUCTION UNDER SECTION 80IB AND WE ARE IN AGREEMENT WITH THE SAME. THERE IS NO FORCE IN THE AGREEMENT OF THE LEARNED DR TO DENY DEDUCTION UNDER SECTION 80IB TO THE ASSESSEE. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDIN GS OF THE CIT(A) ON THE ISSUE AND UPHOLD THE SAME. WE, THEREFORE, DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 6. ON READING OF THE FINDINGS OF THE COMMISSIONER O F INCOME TAX (APPEALS) AND THE ABOVE DECISION OF THE CO- ORDINATE BENCH OF THIS TRIBUNAL, WE SEE THAT COMMIS SIONER OF INCOME TAX (APPEALS) HAD GIVEN A FINDING THAT IN TH E CASE OF THE ASSESSEE INDUSTRIAL UNDERTAKING IS LOCATED IN T HE INDUSTRIALLY BACKWARD STATE OF PONDICHERRY AND THE RE IS NO NEED TO FULFILL THE REQUIREMENTS OF SSI AND THE ASS ESSEE IS ITA NO.2061/MDS/2013 12 ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(4) OF THE ACT. THIS VIEW OF THE COMMISSIONER WAS AFFIRMED BY THE CO-ORD INATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR T HE ASSESSMENT YEAR 2009-10. IN THE CIRCUMSTANCES, FOLL OWING THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE, WE DIRECT THE ASSESSING OFFICE R TO ALLOW THE CLAIM OF THE ASSESSEE UNDER SECTION 80-IB(4) OF THE ACT. WE REVERSE THE ORDERS OF THE LOWER AUTHORITIES ON T HIS ISSUE AND ALLOW THE GROUNDS OF APPEAL OF THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 7 TH DAY OF MARCH, 2014 AT CHENNAI. SD/- SD/- (A.MOHAN ALANKAMONY) (CHALLA NAGEN DRA PRASAD) ACCOUNTANT MEMBER JUDI CIAL MEMBER CHENNAI, DATED THE 7 TH MARCH, 2014. SOMU COPY TO: (1) APPELLANT (4) CIT(A) (2) RESPONDENT (5) D.R (3) CIT (6) G.F.