The ACIT(OSD)-I,Range-4, Ahmedabad V. Lacer Laser Tech Pvt.Ltd.,., Gandhinagar

ITA 2344/AHD/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73068 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 18-02-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 16-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO.2344/AHD/2010 A.Y. 2005-06 THE ACIT (OSD)-I, RANGE- 4, AHMEDABAD, NAVJIVAN TRUST BUILDING, OFF. ASHRAM ROAD, AHMEDABAD. V/S. LANCER LASER TECH PVT. LTD. 17-B, KAMALDEEP INDS ESTATE, KHATRAJ, KALOL, GANDHINAGAR. PAN: AAACL 5061F (APPELLANT) (RESPONDENT) REVENUE BY : SHRI O.P. BATHEJA, SR.D.R. ASSESSEE(S) BY : NONE / DATE OF HEARING : 18/02/2014 / DATE OF PRONOUNCEMENT: 26/02/2014 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, J.M. THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF LEARNED CIT(A)-XX, AHMEDABAD, DATED 05.04.2010 A ND THE GROUNDS RAISED ARE REPRODUCED BELOW: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO GRANT DEDUCTION U/S. 80IB OF THE ACT. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE FACT THAT FOR THE YEAR UNDER CONSIDER5AIN, THE LIMI T WAS RS.1 CRORE FOR SSI UNITS AND THEREFORE THE LD. CIT(A) ERRED IN DIR ECTING THE AO TO GRANT DEDUCTION APPLICABLE TO SSI UNITS. AS PER THE NORMS, SET BY THE GOVERNMENT, THE ASSESSEES UNIT IS NOT FALLING UNDE R THE SSI UNITS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S. 143(3) R.W.S. 147 OF IT ACT, DATE D 29.10.2009 WERE THAT THE ASSESSEE COMPANY IS AN INDUSTRIAL UND ERTAKING AND ITA NO.2344/AHD/2010 ACIT VS. LANCER LASER TECH PVT. LTD. A.Y. 2005- 06 - 2 - QUANTIFIED AS SMALL SCALE INDUSTRIAL UNDERTAKING, A S NOTED BY THE AO. AS PER AO SUCH INDUSTRIAL UNDERTAKING IS REQUIR ED TO MAKE INVESTMENT IN THE FIXED ASSETS SUCH AS PLANT AND MA CHINERY NOT EXCEEDING RS.1 CRORE. AS PER THE BALANCE SHEET, THE TOTAL VALUE OF PLANT AND MACHINERY WAS AT RS.2,95,14,990/-; HENCE, ACCORDING TO AO THE SAID INVESTMENT HAD EXCEEDED THE LIMIT FIXED FOR INVESTMENT IN PLANT AND MACHINERY. IT WAS HELD THAT THE ASSESSEE HAD CEASED TO BE AN SSI UNIT NOT ELIGIBLE FOR DEDUC TION U/S. 80IB OF THE ACT. THE CLAIM OF DEDUCTION U/S.80IB OF RS.12,9 4,294/- WAS DENIED BY THE AO, WHICH WAS CHALLENGED. 3. WHEN THE MATTER WAS CARRIED BEFORE THE LEARNED C IT(A), A VIEW WAS TAKEN IN FAVOUR OF THE ASSESSEE AS FOLLOWS : I HAVE GONE THROUGH THE FACTS OF THE CASE, ASSESSM ENT ORDER AND SUBMISSION MADE BY THE APPELLANT. THE ADDITION WAS PRIMARILY MADE BY THE AO AFTER REOPENING THE CASE, AS THE VALUE OF THE PLANT AND MACHINERY EXCEEDED RS.1 CRORE. THE VALUE OF PLANT & MACHINERY WAS SHOWN AT RS.2,95,14,990/-. FROM THE NOTIFICATION NO . S.O.857(E) DATED 10/12/1997 ISSUED BY DEPARTMENT OF INDUSTRIAL POLICY AND PROMOTION, NEW DELHI CLARIFIES AS UNDER: 1. SMALL SCALE INDUSTRIAL UNDERTAKING: AN INDUSTRI AL UNDERTAKING IN WHICH THE INVESTMENT IS FIXED ASSETS IN PLANT AND MACHINERY, WHETHER HELD ON OWNERSHIP TERMS OF ON LE ASE OR ON HIRE PURCHASE, DOES NOT EXCEED RUPEES THREE CRORES. I FIND THAT THE AMOUNT OF INVESTMENT IN PLANT AND M ACHINERY, AS DEFINED FOR THE PURPOSE OF SSI AT THE COMMENCEMENT OF THE F INANCIAL YEAR WAS NOT EXCEEDING THE LIMIT AS PRESCRIBED UNDER THE ACT AND THE ASSESSEE WAS ENTITLED FOR DEDUCTION U/S. 80IB OF THE ACT AS THE VALUE OF PLANT AND MACHINERY WAS OF RS.2,95,14,990/- I.E. WELL BEL OW THE LIMIT PRESCRIBED OF RS.3 CRORES. THE AO WHILE DISALLOWING THE CLAIM OF DEDUCTION U/S.80IB OF THE ACT, HAS MISINTERPRETED T HE STATUS OF THE APPELLANT AND TAKING IT AS A NON SSI UNIT. NOW, I T IS CLEAR THAT DURING THE YEAR UNDER CONSIDERATION, THE APPELLANT WAS COV ERED UNDER THE LIMIT OF SSI UNIT AND THEREFORE WAS ELIGIBLE FOR DE DUCTION U/S.80IB OF THE ACT. THEREFORE, THE AO IS HEREBY DIRECTED TO GR ANT DEDUCTION U/S.80IB OF THE ACT. THIS GROUND IS THEREFORE ALLOW ED. ITA NO.2344/AHD/2010 ACIT VS. LANCER LASER TECH PVT. LTD. A.Y. 2005- 06 - 3 - 3.1 ON THE DATE OF HEARING AN ADJOURNMENT APPLICATI ON WAS MOVED. 4. AFTER CONSIDERING THE FACTS OF THE CASE, WE HAVE NOTED THAT THE MATTER IS DIRECTLY COVERED BY FEW DECISIONS; HE NCE, DECIDED TO PROCEED WITH THE CASE INSTEAD OF GRANTING ADJOURNME NT. 4.1 THE PRESENT LEGAL POSITION IS THAT THIS VERY IS SUE IS COVERED BY A DECISION OF RESPECTED CO-ORDINATE BENCH PRONOU NCED IN THE CASE OF M/S. OLYMPIC LAMINATES PVT. MEHSANA PVT. LTD. V/S. ACIT, MEHSANA, ORDER DATED 28.02.2013 , WHEREIN VIDE PARAGRAPH 4 IT WAS HELD AS UNDER: 4. SINCE THERE IS NO DISPUTE ABOUT THE FACT THAT LI MIT OF INVESTMENT IN PLANT AND MACHINERY TO SSI UNIT IS OF RS. 5 CRORES AND NOT RS. I CRORE AS PER PROVISIONS OF NB OF INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951 APPLICABLE TO THE ASSESSEE-EOMPANY AS SMALL SC ALE INDUSTRIES AS PROVIDED IN MICRO TO THE SMALL AND MEDIUM ENTERPRIS ES DEVELOPMENT ACT, 2006 AND ASSESSEE'S INVESTMENT IN PLANT AND MA CHINERY BEING OF RS. 3,2O,87,250/- AS ON 31.03.2008 WHICH IS BELOW THE L IMIT OF RS. 5 CRORES, WE FEEL NO NEED TO INTERFERE WITH THE ORDER IN HOLD ING THAT ASSESSEE WAS ENTITLED FOR DEDUCTION U/S 8OIB OF THE ACT AND THE ORDER PASSED BY HIM IN THIS RESPECT IS HEREBY UPHELD. THIS GROUND OF THE R EVENUE IS DISMISSED. 5. RESPECTFULLY, FOLLOWING THE AFORESAID DECISION O F HONBLE ITAT A BENCH, AHMEDABAD, WE HEREBY CONFIRM THE FI NDINGS OF LEARNED CIT(A) AND DISMISS THE GROUNDS OF THE REVEN UE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. SD/- SD/- (N.S. SAINI) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED 26/02/2014 PRABHAT KR. KESARWANI, SR. P.S. ITA NO.2344/AHD/2010 ACIT VS. LANCER LASER TECH PVT. LTD. A.Y. 2005- 06 - 4 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD