Asst. Commissioner of Income Tax, Circle-2(1), Panaji, Panaji V. M/s Lift Controls Pvt. Ltd., Goa

ITA 340/PAN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88736 (ITAT-PANAJI)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2015
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 14-01-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 08-10-2014
• Court: TRIBUNAL
• Department Lawyers: DR S SUNDARESAN LD
• Assessee Lawyers: V ARDHMAN JAIN CA LD
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ,PANAJI BENCH, PANAJI [BEFORE SHRI P. K. BANSAL, AM & SHRI D.T GARASIA, JM] I.T.A NO . 340 /PNJ/2014 A.Y 20 10 - 11 A.C.I.T, CIR 2(1), PANAJI VS. M/S. LIFT CONTROLS (P) LTD PAN: AA ACL6371Q ( APPELLANT) ( RESPONDENT ) FOR THE APPELLANT: DR. S. SUNDARESAN, LD.DR FOR THE RESPONDENT : SHRI V ARDHMAN JAIN, CA , LD.AR DATE OF HEARING: 14 - 01 - 2015 DATE OF PRONOUNCEMENT: 14 - 01 - 2015 ORDER PER SHRI P. K. BANSAL, AM: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A), PANAJI DATED 22 - 07 - 2014 CHALLENGING THE ORDER OF THE CIT(A) BY TAKING FOLLOWING GROUNDS: - 1. THE LD.CIT(A) HAS ERRED IN ALLOWING THE ASSESSEES APPEAL BY ALLOWING THE CLAIM OF DEDUCTION CLAIM U /S 80IB FOR UNIT - II WITHOUT CONSIDERING THE MERIT OF THE CASE. 2. THE LD.CIT(A) HAS ERRED IN SAYING THAT UNIT - II IS AN INDEPENDENT MANUFACTURING UNIT ELIGIBLE FOR DEDUCTI ON U /S 80IB OF THE I.T ACT AND ALLOWED THE DEDUCTION U/S 80IB(4) ON PROFIT OF SAID UNIT. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS RELATING TO THE CLAIM OF DEDUCTION U/S 80IB. AFTER HEARING RIVAL SUBMISSIONS AND CAREFULLY CONSIDER ING THE SUBMISSIONS, WE FIND THAT THE SAID ISSUE IS FULLY COVERED BY THE DECISION /ORDER DATED 04 - 09 - 2014 OF TRIBUNAL IN ITA NOS.147 TO 152/PNJ/2014 FOR THE ASSESSMENT YEARS 2004 - 05 TO 2009 - 10 [ASSESSEES OWN CASE] . WE ALSO FIND THAT THE ISSUE IS RELATING TO CLAIM OF DEDUCTION BY THE ASSESSEE U/S 80IB IN RESPECT OF UNIT - II . WE NOTED THAT THE TRIBUNAL VIDE ITS ORDER DATED 04 - 0 - 2014 TOOK THE VIEW THAT THE UNIT II OF THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB BY HOLDING AS UNDER: - 4.9 IN THE CASE OF THE ASSESSEE WE NOTED THAT ONCE THE WIRE IS CUT AND STRIPPED AFTER GOING THROUGH DIFFERENT PROCESS AND TESTING AN ENTIRELY NEW PRODUCT COMES WHICH HAS A DIFFERENT UTILITY WHICH IS BEING USED IN ELECTRONIC INDUSTRY FOR ELEVATORS. THIS WIRE HARNESS HAS INDEPENDENT IDENTITY AND CAN BE SOLD IN THE MARKET. THIS PRODUCT NO MORE REMAINS THE ORDINARY WIRE. THEREFORE, WE AGREE WITH THE LD.AR THAT UNIT - II IS ENGAGED IN MANUFACTURING OF A SEPARATE PRODUCT. WE DO NOT AGREE WITH THE LD.DR THAT IF TWO UNITS ARE ESTABLISHED UNDER THE SAME ROOF EVEN THOUGH THEY ARE HAVING SEPARATE IDENTITY 2 ITA NO. 340/PNJ/2014 - AM M/S. LIFT CONTROLS (P) LTD THEY CANNOT BE REGARDED TO BE SEPARATE INDUSTRIAL UNDERTAKING. BOTH THE UNITS ARE HAVING INDEPENDENT IDENTITY, MANUFACTURING DIFFERENT PRODUCTS, HAVING DIFFERENT MACHINERY. THEY ARE NOT INTER - DEPENDENT FOR MANUFACTURING THEIR PRODUCT, THEREFORE, IT CANNOT BE SAID THAT THE UNITS ARE NOT INDEPENDENT. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS ESTABLISHED THE UNIT BY SPLITTING UP OR RECONSTRUCTION OF BUSINESS WHICH IS ALREADY IN EXISTENCE. THE N EW UNIT HAS ALSO NOT BEEN FORMED BY TRANSFERRING TO THE NEW BUSINESS MACHINERY AND PLANT PREVIOUSLY USED FOR ANY PURPOSE. IN RESPECT OF THE CONDITION ABOUT THE EMPLOYMENT OF THE EMPLOYEES, WE NOTED THAT THE CIT(A) HAS GIVEN A CLEAR - CUT FINDING THAT THERE A RE MORE THAN 10 EMPLOYEES EMPLOYED IN UNIT - II IN ADDITION TO THE CONTRACT AND CASUAL LABOUR. WE, THEREFORE, DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF CIT(A). CIT(A) HAS GIVEN A FINDING OF FACT AFTER GOING THROUGH THE RECORDS AND BILLS. THE L D.DR EVEN THOUGH VEHEMENTLY CONTENDED THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB , COULD NOT ADDUCE ANY COGENT MATERIAL OR EVIDENCE WHICH MAY COMPEL US TO REVERSE THE FINDING GIVEN BY CIT(A). WE, ACCORDINGLY, CONFIRM THE ORDER OF CIT(A). RESPECTFULLY FOLLOWING THE AFORESAID ORDER OF THE TRIBUNAL, WE CONFIRM THE ORDER OF CIT(A) 3. IN THE RESULT, APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 14 - 01 - 2015 SD/ - SD/ - ( D.T GARASIA ) ( P. K. BANSAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 14 - 01 - 2015 **PRADIP (SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. A PPELLANT 2 RESPONDENT 3. THE CIT(A) CONCERNED 4. 5. THE CIT CONCERNED THE D . R 6. GUARD FILE TRUE COPY, BY ORDER ASSTT. REGISTRAR