The ITO, Ward-4(1), Ahmedabad V. Gateway Technolabs Pvt. Ltd., Ahmedabad

ITA 3080/AHD/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0207 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 30-10-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 13-07-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHELLEY JINDAL
• Assessee Lawyers: J P SHAH
• Section: 10B

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL : C BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SH RI D.C. AGARWAL, A.M.) I.T.A. NOS. 1112 & 3080/AHD./2007 ASSESSMENT YEARS : 2004-2005 & 2005-2006 INCOME TAX OFFICE, WARD-4(1), AHMEDABAD -VS.- G ATEWAY TECHNOLAB PVT. LTD., AHMEDABAD (P.A. NO. AABCG 4206 C) (APPELLANT) (R ESPONDENT) APPELLANT BY : SHRI SHELLEY JINDAL RESPONDENT BY : SHRI J.P. SHA H O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER :- THESE TWO APPEALS BY THE DEPARTMENT ARE AGAINST TWO SEPARATE ORDERS DATED 20.12.2006 AND 03.05.2007 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-VIII, AHMEDABAD FOR THE ASSESSMENT YEARS 2004-05 AND 2005-06 RESPECTIVELY. BOTH THE APPEALS WERE HEARD ON THE SAME DATE, ARGUED BY COMMON LD. REPRESENTATIVES, THEREFORE, THESE ARE DECIDED TO DISPOSE OF TOGETHER BY THIS COMMON O RDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED IN ITA NO. 1112/AHD./2007 FOR THE ASSESSMENT YEAR 2004-05 ARE AS UNDER :- (1) THE LD. C.I.T.(A) ERRED IN LAW AND ON FACTS OF THE CASE IN HOLDING THAT THE ASSESSEE HAD SATISFIED ALL THE REQUISITE CONDIT IONS U/S. 10B READ WITH SECTION 80I(2) AND DIRECTING THE A.O. TO ALLOW THE DEDUCTION CLAIMED RS.96,41,778/- U/S. 10B OF THE ACT EXCLUDING THE RE DEMPTION CHARGES OF RS.6,000/- IGNORING THE FACT THAT U/S. 10B WHAT IS TO BE SEEN IS THE RATIO OF OLD PLANT AND MACHINERY VIS--VIS NEW PLANT AND MACHINERY IN THE YEAR OF FORMATION OF THE NEW UNIT AND NOT SUBSEQUEN T ACQUISITION OF ANY PLANT AND MACHINERY. (2) THAT THE APPEAL FILED BY THE DEPARTMENT AGAINST THE ORDER OF LD. C.I.T.(A) FOR THE A.Y. 2003-04 ON SIMILAR ISSUE IS PENDING BEFORE THE HON'BLE ITAT AND THE GROUNDS OF APPEAL RAISED IN TH AT YEAR BE PERMITTED TO REFER AND RELY FOR THE YEAR UNDER APPEAL. 2 THE GROUNDS RAISED IN ITA NO. 3080/AHD./2007 FOR TH E ASSESSMENT YEAR 2005-06 ARE AS UNDER :- (1) THE LD. C.I.T.(A) ERRED IN LAW AND ON FACTS OF THE CASE IN HOLDING THAT THE ASSESSEE HAD SATISFIED ALL THE REQUISITE CONDIT IONS U/S. 10B AND IN DIRECTING THE A.O. TO ALLOW THE DEDUCTION CLAIMED R S.2,28,01,897/- U/S. 10B WHAT IS TO BE SEEN IS THE RATIO OF OLD PLANT AN D MACHINERY VIS--VIS NEW PLANT AND MACHINERY IN THE YEAR OF FORMATION OF THE NEW UNIT AND NOT SUBSEQUENT ACQUISITION OF ANY PLANT AND MACHINE RY. (2) THAT THE APPEAL FILED BY THE DEPARTMENT AGAINST THE ORDER OF LD. C.I.T.(A) FOR THE A.Y. 2003-04 ON SIMILAR ISSUE IS PENDING BEFORE THE HON'BLE ITAT AND THE GROUNDS OF APPEAL RAISED IN TH AT YEAR BE PERMITTED TO REFER AND RELY FOR THE YEAR UNDER APPEAL. 3. AT THE OUTSET, SHRI J.P. SHAH, LD. COUNSEL OF TH E ASSESSEE STATED THAT THE ASSESSEES BUSINESS WAS STARTED FOR THE FIRST TIME IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2002-03 IN A NEW PREMISES OF SOFTWARE DEVELOPMENT AND EXPORT AND ALSO THE BUSINESS OF FOUR SISTER CONCERNS AND THIS IS NOT THE FIRST YEAR IN WHICH THE DEDUCTI ON UNDER SECTION 10B OF THE ACT WAS CLAIMED. IN THE ASSESSMENT YEAR 2003-04, ITAT, C BENCH, AHMED ABAD VIDE ORDER DATED 04-09-2009 IN ITA NOS. 2473 & 2519/AHD./2006 IN ASSESSEES OWN CASE F OR THE ASSESSMENT YEAR 2003-04 FOLLOWING THE JUDGMENT OF THE HON'BLE GUJARAT HIGH COURT IN T HE CASE OF SAURASHTRA CEMENT & CHEMICAL INDUSTRIES LTD. VS.- CIT REPORTED IN [1980] 123 IT R 669 (GUJ.), AND THE DECISION OF ITAT, CHANDIGARH B BENCH IN THE CASE OF JAIN UDHAY HOSI ERY (P) LTD. VS.- ACIT (2005) 1 SOT 193 (CHD.) HELD THAT THE ASSESSEE IS ENTITLED TO DEDUCT ION UNDER SECTION 10B OF THE INCOME TAX ACT, 1961. HE ACCORDINGLY CONTENDED THAT THE MATTER IS S QUARELY COVERED BY THE DECISION OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2003-04 IN ASSESSE ES OWN CASE (SUPRA). THEREFORE, THE VIEW TAKEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS) DIRECTING THE ASSESSING OFFICER TO ALLOW THE DEDUCTION UNDER SECTION 10B OF THE I.T. A CT IN BOTH THE APPEALS BE UPHELD. 4. SHRI SHELLEY JINDAL, LD. DEPARTMENTAL REPRESENTA TIVE APPEARED AND COULD NOT CONTROVERT THE AFORESAID SUBMISSIONS MADE BY THE LD. COUNSEL F OR THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS. 5. WE HAVE GIVEN OUR CAREFUL CONSIDERATION TO THE R IVAL SUBMISSIONS MADE BEFORE US AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. THE H ON'BLE GUJARAT HIGH COURT IN THE CASE OF SAURASHTRA CEMENT & CHEMICAL INDUSTRIES LTD. VS.- CIT (SUPRA) LAID DOWN THAT ONCE DEDUCTION 3 IS ALLOWED IN THE FIRST YEAR, REVENUE HAS NO POWER TO DENY THE DEDUCTION IN SUBSEQUENT ASSESSMENT YEARS AS PROVIDED UNDER THE ACT. SIMILAR VIEW HAS T AKEN BY THE ITAT, B BENCH CHANDIGARH, IN THE CASE OF JAIN UDHAY HOSIERY (P) LTD. VS.- ACIT (SUPRA). SINCE THE MATTER IS SQUARELY COVERED BY THE DECISION OF ITAT, C BENCH, AHMEDABAD IN AS SESSEES OWN CASE IN ITA NOS. 2473 & 2519/AHD./2006 FOR THE ASSESSMENT YEAR 2003-04, WE FOLLOWING THE SAME UPHOLD THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN RESP ECT OF BOTH THE APPEALS. 6. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE DISMISSED. THE ORDER PRONOUNCED IN THE COURT ON 30.10.2009 SD/- SD/- (D.C. AGARWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 / 10 / 2009 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE RESPONDENT 3) THE CIT(A) CONCERNED, (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.