THE ITO, Ward-4(2), Ahmedabad V. KADAM EXPORTS PVT. LTD., Ahmedabad

ITA 3023/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5975 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-07-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 10-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMIR TEKRIWAL SRDR
• Assessee Lawyers: TUSHER P HEMANI
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE SHRI D.K. TYAGI, HONBLE JUDICIAL MEMBER AND SHRI A.K.GARODIA, HONBLE ACCOUNTANT MEMBER ITA NO.3023/AHD/2009 ASSESSMENT YEAR:2006-07 DATE OF HEARING:26.7.11 DRAFTED:26.7.10 INCOME TAX OFFICER, WARD-2(2), ROOM NO.105, NAVJIVAN TRUST BUILDING OFF. ASHRAM ROAD, AHMEDABAD V/S. KADAM EXPORTS PVT. LTD. F-101, ASAVARI COMPLEX, B/H FUN REPUBLIC CINEMA, SATELLIE ROAD, AHMEDABAD-380015 (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI SAMIR TEKRIWAL, SR-DR RESPONDENT BY:- SHRI TUSHER P HEMANI, AR 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)-VIII, AHMEDABAD DATED 06-07-2009 FOR T HE ASSESSMENT YEAR 2006-07. THE REVENUE HAS TAKEN THE FOLLOWING GROUND :- 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION OF RS.1,21,07,688/- MADE ON ACCOUNT OF DIS ALLOWANCE OF DEDUCTION U/S 10B OF THE T. ACT. 1961. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN BUSINESS OF MANUFACTURING AND TR ADING OF PSYLLIUM HUSKS. THE PURCHASES SEEDS AND AFTER PROCESSING AND CLEANI NG THE SAME MANUFACTURED, PSYLLIUM HUSKS WHICH IS EXPORTED TO E UROPEAN COUNTRIES AND USA. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSIN G OFFICER OBSERVED THAT ITA NO.3023/AHD/2009 A.Y. 2006-07 ITO WD-2(2), ABD V. KADAM EXPORTS PVT. LTD. PAGE 2 ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION U/S.10B OF THE INCOME-TAX ACT, 1961 SINCE THE CONDITIONS AS LAID DOWN U/S. 10B(2)(II) A ND 10B(2)(III) OF THE ACT WERE NOT FULFILLED. HE ACCORDINGLY ISSUED A SHOW-CAUSE N OTICE TO THE ASSESSEE TO JUSTIFY ITS CLAIM FOR DEDUCTION U/S 10B OF THE ACT. ASSESSING OFFICER ALSO REFERRED TO THE OBSERVATION OF THE AO IN THE ASSESS MENT ORDER FOR THE ASSESSMENT ORDER 2001-02 FOR PURCHASE OF PLANT AND MACHINERY FROM M/S BHAGIRATH SEEDS PROCESSING PVT. LTD. IN ASSESSMENT ORDER 1995-96. IN RESPONSE TO THE SHOW-CAUSE NOTICE ASSESSEE REPLIED VIDE LETTER DATED 20-11- 2008 ENCLOSING THEREWITH THE EXPLANATION AND REASON S ADVANCED FOR THE ASSESSMENT FOR THE ASSESSMENT ORDER 2001-02. THE AS SESSEE ALSO ATTACHED COPIES OF REPLIED DATED 19-12-2003 AND 23-12-2003 F ILED DURING THE ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT ORDER 200 1-02. THESE REPLIES HAVE BEEN REPRODUCED BY ASSESSING OFFICER IN PARA-5.1 OF HIS ASSESSMENT ORDER. THE AO HOWEVER, DID NOT FIND THE ASSESSEES REPLY SATISFACTORY AND DISALLOWED ITS CLAIM OF DEDUCTION U/S 10B OF THE AC T HOLDING THAT ASSESSEE- COMPANY WAS AN INDUSTRIAL UNDERTAKING FORMED BY REC ONSTRUCTION OF BUSINESS ALREADY IN EXISTENCE BY TRANSFER OF PLANT AND MACHI NERY PREVIOUSLY USED. FURTHER, THE OLD PLANT AND MACHINERY CONSISTED MORE THAN 20% OF THE ENTIRE VALUE OF PLANT AND MACHINERY OF THE ASSESSEE, RENDE RING IT INELIGIBLE IN TERMS OF CONDITIONS U/S 10B(2)(II) AND 10B(2)(III) OF THE ACT. 3. BEFORE LD. CIT(APPEALS) ASSESSEE PLACED RELIANCE ON THE ORDER OF THE HONBLE ITAT IN ASSESSEES OWN CASE FOR THE ASSESSM ENT ORDER 2003-04 AND THE LD. CIT(APPEALS) ALLOWED THE APPEAL OF THE ASSE SSEE BY OBSERVING AS UNDER:- 5.7 I HAVE CONSIDERED THE FACTS OF THE CASE AND TH E SUBMISSIONS OF THE LD. A.R CAREFULLY. IT IS SEEN THAT THE A.O WHILE DI SALLOWING THE APPELLANTS CLAIM FOR DEDUCTION U/S.10B HAS FOLLOWE D THE ASSESSMENT ORDER FOR THE A.YS 2001-02 & 2003-04. IT IS FURTHER SEEN THAT IN THE SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE THE APP ELLANTS CLAIM HAS BEEN ALLOWED FOR DEDUCTION U/S/10B BY THE LD. CIT(A ) HAVE BEEN CONFIRMED BY THE HONBLE ITAT, AHMEDABAD IN APPEAL NO. 1044/AHD/2005 AND ITA NO.273/AHD/2007 FOR THE A.Y. 2001-02 AND 2003-04 RESPECTIVELY. FURTHER, THE A.O WHILE DISALL OWING THE APPELLANTS ITA NO.3023/AHD/2009 A.Y. 2006-07 ITO WD-2(2), ABD V. KADAM EXPORTS PVT. LTD. PAGE 3 CLAIM FOR DEDUCTION U/S.10B HAS NOT ESTABLISHED WIT H COGENT MATERIAL THAT THE MACHINERIES BROUGHT BY THE APPELLANT FROM M/S. BHAGIRATH SEEDS PROCESSORS PVT. LTD WERE 2-0% OR MORE OF THE ENTIRE VALUE OF PLANT & MACHINERY OF THE APPELLANT DURING THE RELEV ANT PERIOD. THEREFORE, KEEPING IN VIEW THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO THE DECISION OF HONBLE ITAT, I DO NO T FIND ANY JUSTIFICATION FOR REJECTION OF APPELLANTS CLAIM FOR DEDUCTION U/ S.10B OF THE ACT. IN VIEW OF THIS, THE APPELLANTS GROUND IS HEREBY ALLOWED. SINCE ASSESSEE HAS GOT RELIEF BY LD. CIT(APPEALS) F OLLOWING THE DECISION OF HONBLE ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT ORDER 2003-04, WE FEEL NO NEED TO INTERFERENCE WITH THE ORDER PASSED BY LD . CIT(APPEALS) AND THE SAME IS HEREBY UPHELD. THIS ISSUE OF REVENUES APPE AL IS DISMISSED. 4. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 29/07/2011 SD/- SD/- (A.K.GARODIA) (D.K. TYAGI) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 29/07/2011 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-VIII, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD