The ITO,Vapi Ward-3, Vapi V. M/s. Subh Paper Products, SILVASSA

ITA 2629/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85798 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 21-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND
• Assessee Lawyers: SURESH KABRA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI ACCOUNTANT MEMBER ITA NO 2629 /AHD/2011 A. Y . 200 8 - 0 9 ITO, VAPI WARD - 3, VAPI. VS M/S. SUBH PAPER PRODUCTS, S. NO. 145/3, VAG HDHARA ROAD, SILVASSA. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI ROOPCHAND, SR.D.R. . ASSESSEE(S) BY : SHRI SURESH KABRA, A.R. / DATE OF HEARING : 0 3 / 0 3 /201 5 / DATE OF PRONOUNCEMENT: 13 / 0 3 /201 5 / O R D E R PER: MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF LE ARNED CIT(A), VALSAD DATED 27 .0 7 .2011 AND ON THE ONLY GROUND RAISED IS REPRODUCED BELOW: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF SALE OF SCRAP AMOUNTING TO RS.14,60,719/ - EXCLUDED FROM THE PROFITS ELIGIBLE FOR DEDUCTION U/S.80IB OF THE ACT . 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT OR DER PASSED U/S. 143(3) DATED 13 . 08 .20 10 WERE THAT THE ASSESSEE FIRM IS IN THE BUSINESS OF MANUFACTURI NG OF CORRUGATED BOXES. ON PERUSAL OF P & L ACCOUNT, IT WAS FOUND BY THE AO THAT THE ASSESSEE HAD SHOWN SCRAP SALES OF RS.14,60,719/ - AND THE SAID INCOME WAS INCLUD ED WHILE CALCULATING THE ITA NO. 2629 /AHD /201 1 ITO VAPI, WARD - 3, VAPI VS. M/S. SUBH PAPER PRODUCTS, SILVASSA FOR A.Y. 200 8 - 0 9 - 2 - DEDUCTION U/S.80IB OF IT ACT. THE IMPUGNED AMOUNT WAS NOT ALLOWED AND TAXED IN THE HANDS OF THE ASSESSEE. 3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, LEARNED CIT(A) HAS DELETED THE ADDITION FOLLOWING HIS PREDECESSOR S ORDER FOR A.Y. 2007 - 08 DATED 27.07.2010 IN ASSESSEE S OWN CASE AS WELL LEARN ED CIT(A) HAS FOLLOWED THE CASE OF JIVANDAS JHUTHABHAI ZAVERI, 258 ITR 785. SINCE, THE ADDITION WAS DELETED NOW THE REVENUE IS FURTHER IN APPEAL. 4. HEARD BOTH THE SIDES. FROM THE SIDE OF THE RESPONDENT - ASSESSEE, LEARNED AR, MR. SURESH KABRA HAS PLACED ON RECORD AN ORDER OF HON BLE ITAT B BENCH AHMEDABAD PRONOUNCED IN ASSESSEE S OWN CASE BEARING ITA NO.2866/AHD/2010 A.Y.2007 - 08 ORDER DATED 11.02.2011 WHEREIN THE RESPECTED CO - ORDINATE BENCH HAS FOLLOWED A DECISION OF THE TRIBUNAL FOR A.Y.2006 - 07 BEARING I TA NO.2413/AHD/2009 WHEREIN IT WAS HELD THAT THE WASTE MATERIAL WAS GENERATED DURING THE COURSE OF THE PRODUCTION OF THE INDUSTRIAL UNDERTAKING AND THAT ONCE A PRODUCT OR A BYPRODUCT OR A WASTE IS THE RESULT OF SOME MANUFACTURING PROCESS WHICH HAS RESULTED IN THE FINISHED GOODS SOLD BY THE ASSESSEE AND THAT FINISHED GOODS WERE UNDISPUTEDLY DERIVED FROM MANUFACTURING ACTIVITY THEN THERE WAS NO REASON TO HOLD THAT THE SCRAP RESULTED FROM THAT VERY ACTIVITY WAS NOT DERIVED FROM THE MANUFACTURING ACTIVITY. THE RESPECTED ITAT BENCH HAS FURTHER OPINED THAT BY ADOPTING THE SAME MANUFACTURING ACTIVITY , THE PROCESS HAS GENERATED TWO ITEMS, I.E., FINISHED PRODUCTS AND WASTE BYPRODUCTS. SINCE, BOTH ARE GENERATED AT THE SAME TIME AND THERE IS NO SUCH DISTINCTION IN THE INCOM E DERIVED FROM MANUFACTURING ACTIVITY THE ASSESSEE WAS HELD AS ENTITLED FOR THE CLAIM OF DEDUCTION. FEW DECISION ITA NO. 2629 /AHD /201 1 ITO VAPI, WARD - 3, VAPI VS. M/S. SUBH PAPER PRODUCTS, SILVASSA FOR A.Y. 200 8 - 0 9 - 3 - WERE ALSO CITED IN THE SAID ORDER, NAMELY, NIRMA INDUSTRIES, 95 ITD 199 (AHD) (SB), FENNER INDIA LTD., 241 ITR 803, SUNDARAM CLAYTON LTD., 133 ITR 34. RESPECTFULLY FOLLOWING THE PAST HISTORY OF THIS CASE, WE FIND THAT THERE IS NO FORCE IN THIS GROUND OF THE REVENUE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AS WELL. RESULTANTLY, THE GROUND RAISED BY THE REVENUE IS DISMISSED. 5. IN THE RESULT, T HE APPEAL OF THE REVENUE IS DISMISSED. SD/ - SD/ - ( ANIL CHATURVEDI ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 13 / 0 3 / 20 1 5 PRABHAT KR. KESARWANI , SR. P . S . S / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - II I, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD