Asst.CIT., Circle-16(3), Hyderabad V. M/s PES Engineers Private Limited, Hyderabad

ITA 653/HYD/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69716 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 03-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: V RAGHAVENDRA RAO
• Section: 80C; 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 653/HYD/2013 ASSESSMENT YEAR : 2010-11 ASST. COMMISSIONER OF INCOME-TAX, APPELLANT CIRCLE 16(3), HYDERABAD. VS. M/S PES ENGINEERS PVT. LTD., RESPOND ENT HYDERABAD. (PAN AABCP4220B) APPELLANT BY : SMT. AMISHA S. GUPT RESPONDENT BY : SHRI V. RAGHAVENDRA RAO DATE OF HEARING : 12/08/2013 DATE OF PRONOUNCEMENT : 12/08/2013 ORDER PER CHANDRA POOJARI, A.M.: THIS APPEAL FILED BY THE REVENUE IS DIREC TED AGAINST THE ORDER PASSED BY THE CIT(A)-V, HYDERABAD ON 31/01/2 013, FOR ASSESSMENT YEARS 2010-11. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF FABRICATION AND ERECT ION, FILED ITS RETURN OF INCOME FOR THE AY 2010-11 ON 11/10/2010 A DMITTING TOTAL INCOME OF RS. 9,47,10,447/- AFTER CLAIMING DE DUCTION OF RS. 1,13,00,359/- U/S80IB OF THE ACT AND ALSO CLAIMED D EDUCTION U/S 80C FOR THE FIRST TIME AT RS. 6,92,71,563/-. THE AS SESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT DETE RMINING THE 2 ITA NO. 653/HYD/13 M/S PES ENGINEERS PVT. LTD. TOTAL INCOME OF THE ASSESSEE COMPANY AT RS. 10,61,7 0,806/- INCLUDING AGRICULTURAL INCOME OF RS. 1,60,000/- BY MAKING THE DISALLOWANCE U/S 80IB OF THE AT OF RS. 1,13,00,359/ -. 3. ON APPEAL, THE CIT(A) FOLLOWING THE DECISION OF HIS PREDECESSOR IN ASSESSEES OWN CASE IN EARLIER ASSES SMENT YEARS FOR AY 2006-07, 2007-08 AND 2008-09, HELD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80IB IN RESPECT OF UNITS WHERE GENERATORS AND PENSTOCKS ARE BEING FABRICATED AND E RECTED. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E IS IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUN DS OF APPEAL: 1. THE ORDER OF THE CIT(A) IS ERRONEOUS BOTH ON THE FACTS AND IN LAW. 2. THE CIT(A) ERRED IN ALLOWING DEDUCTION U/S 80B C LAIMED BY THE ASSESSEE AS THE ASSESSEE HAD NOT MANUFACTURE D ANY ARTICLE OR THING, WHICH IS THE MAIN CONDITION OF SE CTION 80B. 3. THE ASSESSEE IS DERIVING INCOME OF FABRICATION A ND ERECTION CHARGES FROM HYDRO POWER PROJECTS, WHICH C ANNOT BE TREATED AS MANUFACTURING ACTIVITY AS HELD BY HONBL E SUPREME COURT IN THE CASE OF NC BHARDWAJ [204 ITR 4 13] AND CIT VS. PRESSURE PILING COMPANY (INDIA) LTD., R EPORTED IN 204 ITR 429. 4. THE CIT(A) IGNORED THE FACT THAT THE ASSESSEE IS NOT ENGAGED IN MANUFACTURING WORK AND THE FABRICATING A ND ERECTING STEEL LINERS TANTAMOUNT TO UNDERTAKING A W ORK CONTRACT ONLY. 5. THE CIT(A) HAS NOT APPRECIATED THE FACTS ESTABLI SHED BY THE ASSESSING OFFICER THAT THE MAIN SOURCE OF INCOM E OF THE ASSESSEE IS FROM RECEIPT OF FABRICATION AND ERECTIO N CHARGES WHICH IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDE RS OF THE AUTHORITIES BELOW. WE FIND THAT SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE THE COORDINATE BENCH OF ITAT, HYDERABAD IN ASSESSEES OWN CASE FOR AY 2008-09 IN ITA NO. 1407/ HYD/2011 3 ITA NO. 653/HYD/13 M/S PES ENGINEERS PVT. LTD. VIDE ORDER DATED 16/11/2011 WHEREIN THE COORDINATE BENCH HELD AS FOLLOWS: 4. WE HAVE HEARD BOTH THE PARTIES. WE FIND THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL, VIZ., ALLOWABILITY OF DEDUCTION U/S 80IB IN RESPECT OF UNITS WHERE GENERATORS AND P ENSTOCKS ARE BEING FABRICATED AND ERECTED HAS COME UP FOR ADJUDICATION BEFORE THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE EARLIER YEARS AND THIS TRIBUNAL FOR THE IMMEDIA TELY PRECEDING YEAR VIZ., 2006-07 IN ITA NO. 106/HYD/201 0 VIDE ITS ORDER DATED 30 TH APRIL, 2010, HAS DECIDED THE SAME IN FAVOUR OF THE ASSESSEE, FOLLOWING STILL EARLIER DEC ISIONS OF THE TRIBUNAL ON THIS VERY ISSUE IN ASSESSEES OWN CASE. CONSISTENT WITH THE VIEW TAKEN BY THE TRIBUNAL IN A SSESSEES OWN CASE FOR EARLIER YEARS ON THE ISSUE INVOLVED IN THIS APPEAL, WE UPHOLD THE ORDER OF THE CIT(A) FOR THE A SSESSMENT YEAR 2008-09 AS WELL AND REJECT THE GROUNDS OF THE REVENUE IN THIS APPEAL. 6. AS THE ISSUE UNDER CONSIDERATION IS MATERIALLY I DENTICAL TO THAT OF THE CASE DECIDED BY THE COORDINATE BENCH IN ASSESSEES OWN CASE FOR AY 2008-09 (SUPRA), RESPECTFULLY FOLLO WING THE SAME WE UPHOLD THE ORDER OF THE CIT(A) IN HOLDING THAT T HAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80IB IN RESPE CT OF UNITS WHERE GENERATORS AND PENSTOCKS ARE BEING FABRICATED AND ERECTED AND DISMISS THE GROUNDS RAISED BY THE REVENUE IN TH IS REGARD. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH AUGUST, 2013 SD/- SD/- (SAKTIJIT DEY) JUDICIAL MEMBER (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 12 TH AUGUST, 2013 KV 4 ITA NO. 653/HYD/13 M/S PES ENGINEERS PVT. LTD. COPY TO:- 1) ACIT, CIRCLE 16(3), 6 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 2) M/S PES ENGINEERS PVT. LTD., 1 ST FLOOR, PANCOM CHAMBERS, 6-3-1090/1/A, R.B. ROAD, SOMAJIGUDA, HYDERABAD. 3) THE CIT (A)-V, HYDERABAD 4) THE CIT-IV, HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.