The DCIT, Circle-10, Ahmedabad V. Shri Areez P. Khambatta, Ahmedabad

ITA 794/AHD/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50838 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-09-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 12-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAY RAJ KUMAR
• Assessee Lawyers: PF JAIN
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, AHMEDABAD BEFORE SHRI T. K. SHARMA, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.794 / AHD/2009 (ASSESSMENT YEAR 2004-05) DCIT, CIRCLE 10, AHMEDABAD VS. SHRI AREEZ P. KHAMBHATTA, B/4, ELLISBRIDGE GYMKHANA, ELLISBRIDGE, AHMEDABAD PAN/GIR NO. : ABMPK6322L (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI JAY RAJKUMAR, SR. DR RESPONDENT BY: SHRI P F JAIN, AR DATE OF HEARING: 07.10.2011 DATE OF PRONOUNCEMENT: 14 .10.2011 O R D E R PER SHRI A. K. GARODIA, AM:- THIS APPEAL BY THE REVENUE HAS BEEN DIRECTED AGAIN ST THE ORDER OF LD. CIT(A) XVI, AHMEDABAD DATED 15.01.2009 FOR THE ASSESSMENT YEAR 2004-05. THE GROUNDS RAISED BY THE REVENUE ARE REP RODUCED AS UNDER: 1) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,05,06,100/- MADE ON ACCOUNT OF DED UCTION U/S 80- IB, THOUGH A.O. HAS GIVEN A CLEAR FINDINGS THAT THE ASSESSEE IS NOT ELIGIBLE FOR THE DEDUCTION. 2) THE LD. CIT(A) HAS ERRED IN DELETING ADDITION TO WARD SALARY & WAGES OF RS.1,50,000/- EACH DISALLOWED BY A.O. 3) THE LD. CIT(A) HAS ERRED IN ALLOWING INDEXATION ON UTI DEEP DISCOUNT BONDS DISALLOWED BY A.O. WHILE COMPUT ING INCOME FROM CAPITAL GAINS. 4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. I.T.A.NO. 794 /AHD/2009 2 5) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE L D. CIT(A) MAY BE SET ASIDE AND THAT OF THE ORDER OF THE A.O. BE R ESTORED TO THE ABOVE EXTENT. 2. AT THE VERY OUTSET, IT WAS POINTED OUT BY THE LD . A.R. THAT GROUND NO.3 RAISED BY THE REVENUE IS MISCONCEIVED BECAUSE THERE IS NO SUCH ISSUE INVOLVED IN THIS YEAR REGARDING INDEXATION OF UTI D EEP DISCOUNT BONDS BECAUSE IT IS CLEARLY STATED BY THE LD. CIT(A) IN P ARA 4 OF HIS ORDER HAT IN ASSESSMENT YEAR 2005-06 ONLY, THERE IS ANOTHER ISSU E REGARDING THE BENEFIT OF INDEXATION OF UNITS OF UTI MIP,99 AND HE NCE, IN ASSESSMENT YEAR 2004-05, THIS GROUND HAS WRONGLY RAISED BY THE REVENUE. IN REPLY, LD. D.R. COULD NOT POINT OUT AS TO HOW THIS GROUND OF REVENUE IS ARISING OUT OF THE ORDER OF AUTHORITIES BELOW. EVEN IN THE ASSESSMENT ORDER, WE FIND THAT THERE IS NO WHISPER REGARDING ANY ISSUE I N RESPECT OF INDEXATION OF UTI MIP,99 AND HENCE, GROUND NO.3 OF THE REVENUE S APPEAL IS REJECTED BEING NOT ARISING OUT OF THE ORDER OF LD. CIT(A). 3. REGARDING GROUNDS NO.1 & 2, LD. D.R. RELIED ON T HE ORDER OF THE A.O. WHEREAS IT IS SUBMITTED BY THE LD. A.R. OF THE ASSESSEE THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE T RIBUNAL DECISION IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2003-04 AND 2006-07 IN I.T.A.NO. 2061/AHD/2007 AND 1942/AHD/2009 DATED 12. 08.2011. HE SUBMITTED THAT THE COPY OF THIS TRIBUNAL ORDER IS A VAILABLE ON PAGES 1 TO 9 OF THE PAPER BOOK. 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS, PERUSED TH E MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT IN ASSESSMENT YEAR 2003-04 ALSO, THIS VERY ISS UE WAS THERE BEFORE THE TRIBUNAL FOR THIS ASSESSEE ITSELF AS TO WHETHER THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80-IB OR NOT. IN THAT YEAR ALSO, IT WAS THE BASIS OF THE A.O. FOR REJECTING THE CLAIM OF THE ASSESSEE THAT THE NU MBER OF WORKERS I.T.A.NO. 794 /AHD/2009 3 ATTENDING THE FACTORY AND WORKING IN THE MANUFACTUR ING PROCESS WAS LESS THAN 10. THIS ISSUE HAS BEEN DECIDED BY THE TRIBUN AL IN FAVOUR OF THE ASSESSEE AS PER PARA 6 & 8 OF THE TRIBUNAL ORDER WH ICH ARE REPRODUCED BELOW: 6. WE HAVE CONSIDERED RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT ON THE BASIS OF LOOSE MUSTER ROLL SHEETS FOUND DURI NG .THE COURSE OF SURVEY THE A.O. HAS HELD THAT ASSESSEE WAS NOT HAVI NG MORE THAN 10 WORKERS, THEREFORE, NOT ELIGIBLE FOR CLAIM OF DE DUCTION U/S.80IB. BY THE IMPUGNED ORDER, THE CIT (A) HAS ANALYZED THE STATEMENT RECORDED BY THE A.O. DURING THE COURSE OF SURVEY AN D ITS REPLIES FILED BY HIM VIS-A-VIS, INSPECTION REPORT OF FACTOR Y INSPECTOR ON TWO OCCASIONS AND THE INSPECTION REPORT OF ESI INSPECTO R, WHEREIN NUMBER OF WORKERS AND ALSO THE NAME OF WORKERS ENGA GED IN THE BOTTLE WASHING UNIT WAS MENTIONED. FROM, THE RECORD S WE FIND THAT A.O. HAS ONLY CONSIDERED WORKERS ENGAGED IN ONE UNI T, WHEREAS THE ASSESSEE WAS HAVING ANOTHER WASHING UNIT OF SAME AC TIVITY, THEREFORE, THE WORKERS ENGAGED IN BOTTLE WASHING UN IT WAS ALSO REQUIRED TO BE TAKEN INTO CONSIDERATION WHILE COMPU TING TOTAL NUMBER OF WORKERS EMPLOYED BY THE ASSESSEE. FROM TH E RECORD WE FIND THAT AS PER THE WAGES REGISTER, ATTENDANCE REG ISTER AND INSPECTION REPORTS OF FACTORY AND ESI INSPECTORS FU LLY SUPPORT THE CONCLUSION DRAWN BY THE CIT (A) TO THE EFFECT :HIT ASSESSEE WAS HAVING BOTTLE WASHING UNIT ALSO, AND THE WORKERS EN GAGED THEREIN ARE ALSO TO BE TAKEN INTO CONSIDERATION FOR COMPUTI NG THE TOTAL NUMBER O' WORKERS EMPLOYED. THE MUSTER ROLL ON WHIC H THE AO HAS RELIED DID NOT CONTAIN THE NAMES OF THE WORKERS . THE NAME OF WORKERS ENGAGED IN BOTTLE WASHING UNIT WERE NOT ENT ERED INTO MUSTER ROLL, HOWEVER, IN THE WAGES REGISTER AND ATT ENDANCE REGISTER THE NAMES OF ALL THESE WORKERS WERE DULY MENTIONED. THE DETAILED FINDING RECORDED BY THE CIT (A) HAS NOT BEEN CONTRO VERTED BY THE DEPARTMENT BY BRINGING ANY POSITIVE MATERIAL ON REC ORD TO THIS EFFECT. ACCORDINGLY, WE DO NOT FIND ANY REASON TO I NTERFERE IN THE FINDING RECORDED BY THE 1 CIT (A) THEREBY TREATING THE ASSESSEE AS ILLEGIBLE FOR CLAIM OF DEDUCTION U/S. 80IB ON THE B ASIS OF NUMBER OF WORKERS EMPLOYED IN ITS INDUSTRIAL UNDERTAKING. 8. THE NEXT GROUND OF THE REVENUE RELATES TO DELETI NG THE DISALLOWANCE OF SALARY EXPENSES INCURRED ON THE WOR KERS. IN VIEW I.T.A.NO. 794 /AHD/2009 4 OF THE FINDING THAT ASSESSEE WAS EMPLOYING MORE THA N 10 WORKERS, THE ACTUAL SALARY PAID TO THEM WAS HELD TO BE ALLOW ABLE BY THE CIT (A). ACCORDINGLY, ON THE SAME REASONING AS GIVEN IN GROUND NO.L OF THE DEPARTMENT'S APPEAL, WE DO NOT FIND ANY INFI RMITY IN THE ORDER OF THE CIT (A) FOR ALLOWING CLAIM OF DEDUCTIO N ON ACCOUNT OF SALARY EXPENSES OF THE EMPLOYEES. ACCORDINGLY GROUN D TAKEN BY THE REVENUE IN BOTH THE YEARS ON ACCOUNT OF SALARY EXPENSES ARE DISMISSED. 5. SINCE, THE FACTS ARE IDENTICAL IN THE PRESENT YE AR, WE DO NOT FIND ANY REASON TO TAKE A CONTRARY VIEW IN THE PRESENT YEAR AND HENCE, RESPECTFULLY FOLLOWING THE PRECEDENT, WE DECLINE TO INTERFERE IN THE ORDER OF LD. CIT(A) ON THIS ISSUE IN THE PRESENT YEAR ALSO. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH OCT., 2011. SD./- SD/- (T.K. SHARMA) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED : 14.10. 2011 SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD I.T.A.NO. 794 /AHD/2009 5 1. DATE OF DICTATION 10.10.11 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13.10.11 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S.13.10.11 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 14.10.11 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.14/10 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 14/10/11 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..