Appeal details
Counselvise Citation
[2011] 140 COUNSELVISE.COM (IT) 48638 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
11 month(s) 27 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
27-04-2011
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
D
Assessment Year
2006-2007
Appeal Filed On
30-04-2010
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI D BENCH BEFORE SHRI D.MANMOHAN (VICE PRESIDENT) & SHRI T.R.SOOD, ACCOUNTANT MEMBER I.T.A.NO.3454/MUM/2010 A.Y 2006-07 DY. COMMISSIONER OF INCOME TAX 8(3), MUMBAI. VS. ROOP TELSONIC ULTRASONIX LTD., A/41, NANDKISHORE INDUSTRIAL ESTATE, OFF MAHAKALI CAVES ROAD, ANDHERI (E), MUMBAI 400 093. PAN: AAACR 2101 G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI JITENDRA YADAV. RESPONDENT BY : SHRI H.N.SHAH. O R D E R PER T.R.SOOD, AM: IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOWIN G GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT[A] ERRED IN ALLOWING DEDUCTION U/S.80I AMOUNTIN G TO ` `` `. .. . 58,40,732/- AS THE INVESTMENT IN THE PLANT & MACHINERY EXCEEDS ` `` ` . 1 CRORE. 2. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THI S ISSUE HAS BEEN DECIDED BY THE LD. CIT[A] VIDE PARA 3.1 WHICH IS AS UNDER: 3.1 DURING THE YEAR, ASSESSEE HAS CLAIMED DEDUCTIO N U/S.80IB OF THE ACT AMOUNTING TO ` `` ` .58,40,732/- BEING 30% OF THE PROFIT OF THE INDUSTRIAL UNDERTAKING AT GANDHINAGAR, GUJARAT. THE ASSESSEE IS CLAIMING THE SAID DEDUCTION UNDER THE CATEGORY SMA LL SCALE INDUSTRIES AS PROVIDED IN SECTION 80IB(3)(II) OF THE ACT. THE BASIC CONDITION FOR THE UNITS FALLING UNDER THIS CATEGORY IS THAT THE U NIT MUST BE CERTIFIED BY THE PRESCRIBED AUTHORITY AS SMALL SCALE INDUSTRY. T O CLAIM AS SMALL INDUSTRY [SSI] THE VALUE OF PLANT AND MACHINERY ALS O SHOULD NOT EXCEED ` `` ` .1 CRORE. THEREFORE, THE ASSESSEE WAS ASKED TO EXPL AIN AS HOW IT IS ELIGIBLE FOR DEDUCTION AS SSI UNIT. IN REPLY, THE A SSESSEE VIDE LETTER DATED 20/11/2008 STATED THAT AN INDUSTRIAL UNDERTAK ING IN WHICH THE INVESTMENT IN FIXED ASSETS IN PLANT AND MACHINERY W HETHER HELD ON OWNERSHIP TERMS OR ON LEASE OR ON HIRE PURCHASE DOE S NOT EXCEED ` `` ` .1 CRORE. FURTHERMORE, IT HAS BEEN STATED THAT THE DEF INITION MAKES CERTAIN EXCEPTIONS IN (DEVELOPMENT & REGULATIONS) ACT, 1951 AND FURNISHED THAT ONE OF THE EXCEPTIONS ARE CHARGES PAID FOR TEC HNICAL KNOW-HOW FEE, 2 WHICH IS NOT A FIXED ASSET BUT MERELY AN INTANGIBLE ASSET, THEREFORE, FOR THE PURPOSE OF SECTION 80IB IT CANNOT BE INCLUDED I N THE VALUE OF PLANT AND MACHINERY. THE SUBMISSION OF THE ASSESSEE IS CO NSIDERED AND FOUND NOT TENABLE AS THE ASSESSEE IS NOT ELIGIBLE F OR DEDUCTION U/S.80IB AS DISCUSSED BY THE ASSESSING OFFICER IN THE ORDER FOR A.Y 2003-04 ONWARDS. THOUGH THE ASSESSEES APPEAL WAS ALLOWED B Y THE CIT[A], AN APPEAL HAS BEEN FILED BY THE REVENUE BEFORE THE ITA T. SIMILAR DISALLOWANCE HAS ALSO BEEN MADE IN A.Y 2005-06. AS THE FACTS OF THE CASE ARE SIMILAR TO A.Y 2003-0 4 & 2005-06, CLAIM OF THE ASSESSEE FOR DEDUCTION U/S.80IB IS REJ ECTED. PENALTY U/S.271[1][C] ARE INITIATED SEPARATELY FOR FILING I NACCURATE PARTICULARS OF INCOME. 3. BEFORE US, THE LD. DR SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 4. ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE S UBMITTED THAT THE ISSUE FOR A.Y 2003-04 WAS DECIDED AGAINST THE R EVENUE BY THE TRIBUNAL IN I.T.A.NO.2377/MUM/07. HE FURTHER SUBMIT TED THAT REVENUE HAS NOT FILED ANY APPEAL FOR THE YEARS 2004-05 & 20 05-06. THIS FACT WAS NOT CONTROVERTED BY THE LD. DR. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT ASSESSEE WAS HELD TO BE SMALL SCALE INDUSTRY ELIGIBLE FOR DE DUCTION U/S.80IB BY THE TRIBUNAL VIDE PARA-8 OF THE ORDER WHICH READS A S UNDER: 8. ON CAREFUL PERUSAL OF THE RELEVANT MATERIAL ON RECORD, RIVAL SUBMISSIONS AND FACTS OF THE CASE, WE ARE OF THE OP INION THAT THE EXCLUSION OF THE AMOUNT BY THE LD. CIT[A] FOR THE P URPOSE OF COMPUTING THE VALUE OF PLANT AND MACHINERY IS IN CO NSONANCE OF THE RELEVANT PROVISIONS OF THE ACT. THEREFORE, THE FIND INGS OF THE LD. CIT[A] DO NOT SUFFER FROM ANY FACTUAL LEGAL INFIRMI TY AND HENCE, THE SAME ARE UPHELD. AS FAR AS GROUND NO.3 IS CONCERNED , THE SAME HAS BEEN DULY CONSIDERED BY THE LD. CIT[A] VIDE PAGE NO .3 OF HIS IMPUGNED APPELLATE ORDER WHEREIN THE LD. CIT[A] OBS ERVED THAT BOTH THE GROUNDS ARE INTERLINKED AND THEY ARE TAKEN TOGE THER FOR DISPOSAL. AFTER REFERRING THE SAID OBSERVATION OF THE LD. CIT [A] GROUND NO.3 RAISED BY THE ASSESSEE STANDS ADJUDICATED BY THE LD . CIT[A] AND, HENCE, THE SAME IS DISMISSED. 3 SINCE NO APPEAL HAS BEEN FILED IN A.YRS. 2004-05 & 2005-06, THERE IS NO SCOPE FOR TAKING A DIFFERENT VIEW IN THE PRESENT YEAR. THEREFORE, FOLLOWING THE ORDER OF THE TRIBUNAL FOR THE A.Y 200 3-04, WE DECIDE THIS ISSUE AGAINST THE REVENUE. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 7/4/2011. SD/- SD/- (D.MANMOHAN) (T.R.SOOD) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI: 27/4/2011. P/-*
