M/s. Auto Industries, Hoshiarpur V. The Addl. Commissioner of Income-tax, Hoshiarpur

ITA 518/ASR/2011

• Counselvise Citation: 51820914 RSA 2011
• Duration Of Justice: 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-07-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 14-10-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LAXMAN SINGH
• Assessee Lawyers: J S BHASIN
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.518(ASR)/2011 ASSESSMENT YEAR:2006-07 PAN :AABFA4510A M/S. AUTO INDUSTRIES, VS. ADDL. COMMR. OF INCOME-T AX, VILL. CHAK GUJJRAN, HOSHIARPUR RANGE, DISTT. HOSHIARPUR. HOSHIARPUR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. J.S. BHASIN, ADV. RESPONDENT BY: SH. LAXMAN SINGH, CIT(DR) DATE OF HEARING:18/07/2012 DATE OF PRONOUNCEMENT:30/07/2012 ORDER PER BENCH ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE CIT(A) JALANDHAR, DATED 29.07.2011 FOR THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL : 1. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING ADDITION OF RS.150553/- MADE THE AO BEING DISALLOWED U/S 80IB ON 10% OF TOTAL PROFIT OF RS.6022105/- FOR PARTLY USE OF MANUFACTURING FACILI TIES OF OTHER CONCERN ON LEASED BASIS FOR DOING PART OF MANUFACTU RING ACTIVITY WHEREAS THE PROFIT OF ELIGIBLE UNIT U/S 80IB WAS AL READY REDUCED BY THE LEASE RENT PAID TO INELIGIBLE UNIT ON ACCOUN T OF USE OF HIS ITA NO.518(ASR)/2011 2 MANUFACTURING FACILITIES. FURTHER DEDUCTION OF 10% OF PROFIT IS ARBITRARY AND AGAINST THE FACTUAL POSITION OF THE C ASE AND AMOUNTS TO DOUBLE REDUCTION OF PROFIT ELIGIBLE FOR REBATE U/S 80IB, FIRSTLY BY LEASE RENT DEBITED TO PROFIT & LOS S ACCOUNT AND SECONDLY 10% OF PROFIT PROPOSED BY LD. A.O. 2. THAT THE ASSESSEE REQUESTS FOR LEAVE TO ADD OR A MEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR DIS POSED OF. 3. THE BRIEF FACTS IN THE PRESENT CASE ARE THAT THE AO NOTED THAT THE ASSESSEE WAS CARRYING ON MANUFACTURING ACTIVITIES IN TWO PHASES AT TWO UNITS, ONE OF WHICH WAS TAKEN BY THE ASSESSEE ON LE ASE AND THE OTHER WAS OWNED BY THE ASSESSEE. IN THE LEASED UNIT THE ASSES SEE WAS PREPARING THE CASTINGS, AND IN ITS OWN UNIT THE ASSESSEE WAS DOIN G MACHINING WORK. SEPARATE ACCOUNTS FOR THE TWO UNITS WERE NOT MAINTA INED BY THE ASSESSEE. FORM NO.10CCB WAS NOT FILED IN RESPECT OF BOTH UNIT S SEPARATELY. THE AO HELD THAT DEDUCTION U/S 80IB IN RESPECT OF THE PROF IT FROM THE LEASED UNIT WAS NOT ADMISSIBLE, AND SINCE THE SAME WAS NOT DETERMIN ABLE IN THE ABSENCE OF DETAILS, HE ESTIMATED THE PROFIT FROM THE LEASED UN IT AT 10% OF THE PROFITS DECLARED (AFTER EXCLUDING DEPB BENEFITS) AND DISALL OWED DEDUCTION U/S 80IB IN RESPECT OF SUCH PROFIT. 4. THE LD. CIT(A) CONFIRMED THE ACTION OF THE A.O. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) THAT THE UNDERTAKING SHOULD NOT ITA NO.518(ASR)/2011 3 HAVE MORE THAN 20% OF MACHINERY USED EARLIER IN IND IA, SINCE A SPECIFIC RESTRICTION HAS BEEN PLACED OVER PERCENTAGE OF USED PLANT AND MACHINERY. THEREFORE, LEASED PLANT CANNOT BE CONSIDERED TO BE PART OF THE ELIGIBLE INDUSTRIAL UNDERTAKING FOR DEDUCTION UNDER SECTION 80IB OF THE ACT. MOREOVER, THERE IS NOTHING ON RECORD PLACED BY THE ASSESSEE THAT THE SAID LEASED PLANT HAS NEVER BEEN USED EARLIER BEFORE THE SAME WAS LEASED TO THE ASSESSEE. ALSO THE EXPENDITURE AND INCOME ARE ALSO NOT IDENTIFIABLE, IN THE ABSENCE OF SEPARATE ACCOUNTS OR FORM NO.10CCB SEPAR ATELY. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS RIGHTLY CONFIRMED THE ACTIO N OF THE A.O. THUS, THE ONLY GROUND OF THE ASSESSEE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.518(ASR)/2011 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30TH JULY, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30TH JULY, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. AUTO INDUSTRIES, HOSHIARPUR. 2. THE ADDL. CIT, HOSHIARPUR. 3. THE CIT(A), JLR. 4. THE CIT,JLR. 5. THE SR DR, ITAT, AMRITSAR.