Vimal Oil & Foods Ltd., Mehsana V. The ACIT.,Circle-8, Ahmedabad

ITA 7/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1534 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-05-2016
• Assessment Year: 2000-2001
• Appeal Filed On: 02-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: P M MEHTA WITH SHRI G M THAKOR
• Keywords: Depreciation; Additional depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. ITA. NO.7/AHD/2012 (ASSESSMENT YEAR:2000-01) VIMAL OIL & FOODS LTD. 31, G.I.D.C., HIGHWAY, MEHSANA 382706 APPELLANT VS. ACIT, CIRCLE-8, AHMEDABAD RESPONDENT PAN: AABCV0765H /BY APPELLANT : SHRI P. M. MEHTA WITH SHRI G. M. THAKOR, A.R. /BY RESPONDENT :SHRI DINESH SINGH, SR. D.R. /DATE OF HEARING : 18.05.2016 /DATE OF PRONOUNCEMENT : 20.05.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-XIV, AHMEDABAD , DATED 25.11.2011 FOR A.Y. 2000-01. ITA NO.7/AHD/12 A.Y. 00-01 [VIMAL OIL & FOODS LTD. VS. ACIT] PAGE 2 2. THE MAIN ISSUE IS WITH REGARD TO DEDUCTION OF RS .17,74,784/- U/S.80IB OF THE ACT. 2.1 ASSESSING OFFICER HAS DISALLOWED THE DEDUCTION U/S.80IB OF THE ACT OF RS.17,74,748/-. THE MAIN THRUST OF THE ASSESSING OFFICER WHILE REJECTING THE CLAIM OF ASSESSEE WAS T HAT ASSESSEE IS NOT ENGAGED IN THE MANUFACTURING. THE STAND OF ASS ESSEE HAS BEEN THAT IT IS FIRST TIME WHEN THIS CLAIM WAS REJE CTED. IN THIS REGARD LD. AUTHORIZED REPRESENTATIVE RELIED ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN CASE OF CIT VS. GUJAR AT COOPERATIVE MILK MARKETING FEDERATION LTD. [2014] 43 TAXMAN.COM 327 (GUJARAT), WHEREIN ASSESSEE WAS ENGAGED IN PRODUCTI ON AND MANUFACTURING OF MILK PRODUCTS. IT HAD INSTALLED A NEW PLANT FOR MANUFACTURING MILK POWDER. IT CLAIMED ADDITIONAL D EPRECIATION ON SAID PLANT WHICH WAS REJECTED BY THE ASSESSING OFFI CER. IT WAS FOUND BY REVENUE AUTHORITIES THAT MILK POWDER WAS C OMPLETELY DIFFERENT FROM MAIN INGREDIENT AND MANUFACTURING PR OCESS LEAD TO SUBSTANTIAL VALUE ADDITION AND FINAL PRODUCT COULD NOT BE RESTORED TO ORIGINAL PRODUCT. MATTER TRAVELLED UPTO THE HON BLE HIGH COURT WHEREIN IT WAS HELD THAT DISTINCT COMMODITY WAS EME RGING FROM ENTIRE COMPLEX PROCESS, PLANT AND MACHINERY INSTALL ED BY ASSESSEE WERE EXIGIBLE TO ADDITIONAL DEPRECIATION. IN THIS BACKGROUND, IT WAS SUBMITTED THAT ASSESSEE IS ALSO ENGAGED IN THE SIMILAR TYPE OF BUSINESS. IT MANUFACTURED THE MILK POWDER. THOUGH , THIS DECISION HAS BEEN RENDERED IN THE POINT OF ADDITION AL DEPRECIATION BUT FACTS. REMAIN THAT ISSUE OF MANUFACTURING HAS B EEN DECIDED IN FAVOUR OF ASSESSEE BECAUSE ASSESSEE IS ALSO MANUFAC TURING MILK POWDER ON SIMILAR LINE. SO, THE QUESTION WAS DIFFE RENT BEFORE HONBLE HIGH COURT IN THE CASE OF CIT VS. GUJARAT C OOPERATIVE MILK ITA NO.7/AHD/12 A.Y. 00-01 [VIMAL OIL & FOODS LTD. VS. ACIT] PAGE 3 MARKETING FEDERATION LTD. (SUPRA), BUT IT HAS BEEN DECIDED IN FAVOUR OF ASSESSEE THAT MILK POWDER IS A DISTINCT P RODUCT MANUFACTURED BY THE ASSESSEE UNIT. TAKING SAME ANA LOGY IN ASSESSEES CASE, WE HOLD THAT ASSESSEE IS ENGAGED I N THE MANUFACTURING OF THE MILK POWDER WHICH IS DISTINCT PRODUCT FROM ITS INGREDIENT AND IT IS NOT IRREVERSIBLE. TAKING ALL FACTS AND CIRCUMSTANCES INTO CONSIDERATION, WE HOLD THAT ASSE SSEE IS ENGAGED IN MANUFACTURING WAS ENTITLED FOR DEDUCTION U/S.80IB OF THE ACT. ASSESSING OFFICER IS DIRECTED ACCORDINGLY . 3. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOW ED. PRONOUNCED IN THE OPEN COURT ON THIS THE 20 TH DAY OF MAY, 2016. SD/- SD/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD: DATED 20/05/2016 S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE $ %&%'( ) / CONCERNED CIT 4 )- / CIT (A) ,-./00'(1 '( 123& / DR, ITAT, AHMEDABAD 4/5678 / GUARD FILE. BY ORDER / 1 / 2% '( 123&