The ITO, Vapi Ward-4, Nani Daman V. M/s. Pure Air Inc., Daman

ITA 888/AHD/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60406 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 30-05-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 10-03-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD C BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT ME MBER I.T.A. NO.888/AHD/2008 A. Y. 2005-06 INCOME TAX OFFICER, VAPI-WARD-4 DAMAN APPELLANT VS. M/S PURE AIR INC GALA NO.13, SURVEY NO.361/1 TO 5 SHRI GANESH INDL. ESTATE, KACHIGAM, DAMAN RESPONDENT WITH I.T.A. NO.884/AHD/2008 A. Y. 2005-06 INCOME TAX OFFICER, VAPI-WARD-4 DAMAN APPELLANT VS. M/S EXCELLENT MFG. CO. GALA NO.4, SURVEY NO.485-C, BULDG. NO.2, DABHEL, NANI DAMAN RESPONDENT WITH I.T.A. NO.885/AHD/2008 A. Y. 2005-06 ITA NOS.888, 884 & 885 OF 2008 A.Y.2005-06 2 INCOME TAX OFFICER, VAPI-WARD-4 DAMAN APPELLANT VS. M/S SUPERIOR WORKS GALA NO.101, SURVEY NO.119 PLOT NO.711(1), SHRINATH INDL. ESTATE, SOMNATH ROAD, DABHEL DAMAN RESPONDENT DEPARTMENT BY : SHRI VINOD TANWANI, SR. D.R. ASSESSEE BY : SHRI RAJESH UPADHYAY, A.R. DATE OF HEARING : 30.05.2012 DATE OF PRONOUNCEMENT : 30.05.2012 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER THESE THREE APPEALS FILED BY THE REVENUE AGAINST TH E ORDER OF LD. CIT(A) IN THE CASES OF THREE DIFFERENT ASSESSEE S, FOR ASSESSMENT YEAR 2005-06, WERE DISPOSED OF BY HONBLE ITAT BY ITS OR DER DATED 28.11.2008 AS IN ALL THESE APPEALS COMMON GROUNDS WERE TAKEN BY T HE REVENUE. 2. SUBSEQUENTLY, REVENUE FILED MISCELLANEOUS APPLI CATION AGAINST THIS ORDER OF TRIBUNAL ON THE GROUND THAT TRIBUNAL HAS NOT ADJUDICATED GROUND NO.2 TAKEN BY THE REVENUE IN THESE APPEALS. THE TRIBUNAL VIDE ITS ORDER DATED 13 TH JANUARY, 2012 FOUND THE SUBMISSIONS OF THE REVENUE TO BE CORRECT AND ORDER DATED 28.11.2008 WAS RECALLED TO THE EXTENT OF DECIDING GROUND NO.2 OF THESE APPEALS WHICH IS COMMON IN ALL THE THREE APPEALS, EXCEPTING THE AMOUNTS AND READS AS UNDER:- DURING THE COURSE OF ASSESSMENT PROCEEDINGS, SINCE IT WAS SUSPECTED THAT THE NATURE OF BUSINESS ACTIVITY RUN BY THE ASSESSEE. THEREFORE, ON THE BASIS OF DETAILS SUBMI TTED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS REGARDIN G THE BUSINESS ACTIVITY OF THE UNDERTAKING, THE FATE OF T HE CLAIM MADE ITA NOS.888, 884 & 885 OF 2008 A.Y.2005-06 3 U/S 80IB OF THE I.T. ACT WAS DECIDED. THE BRIEF DES CRIPTION OF THE BUSINESS ACTIVITY OF THE ASSESSEE UNDERTAKING IS EL ABORATELY DISCUSSED IN THE SUB-PARAS OF PARA-4 OF THE ASSESSM ENT ORDER. THEREFORE, ON THE BASIS OF DETAILS OF BUSINESS ACTI VITY OF THE UNDERTAKING SUBMITTED BY THE ASSESSEE DURING THE VA RIOUS STAGES OF THE ASSESSMENT PROCEEDINGS, THE CONCLUSION WAS D RAWN THAT THE UNIT OF THE ASSESSEE WAS NOT MANUFACTURING OR P RODUCING ANY NEW ARTICLE OR THING, AND HENCE THE UNDERTAKING OF THE ASSESSEE WAS TREATED AS NON-MANUFACTURING UNIT. THEREFORE, THE CLAIM MADE BY THE ASSESSEE U/S 80IB OF THE I.T. ACT WAS D ISALLOWED AND THE SAME WAS BROUGHT FOR THE TAXATION. 3. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORDS, WE FIND THAT LD. CIT(A) HAS DEALT THIS GROUND AS UNDER:- AS FAR AS DISALLOWANCE OF EXPENSES ON ACCOUNT OF CONSULTATION CHARGES AND CERTAIN EXPENSES, FOR THE ASSESSEES FAILURE TO MAKE TDS AND PRODUCE PROOF OF PAYMENT OF TDS IS CONCERNED, SINCE THE ENTIRE INCOME OF THE APPELLANT IS ONLY FROM MANUFACTURING ACTIVITIES, WHICH IS HELD TO BE ELIGI BLE FOR DEDUCTION U/S 80IB OF THE ACT, THE SAID DISALLOWAN CE WILL MERELY RESULT IN INCREASING THE AMOUNT OF INCOME OF THE AP PELLANT. HOWEVER, EVEN AFTER MAKING ADDITION OF DISALLOWANCE , THE FACT REMAINS THAT SUCH INCREASED INCOME IS ALSO SUBJECT TO DEDUCTION U/S 80IB AND NOT EXIGIBLE TO TAX, I CONSIDER THAT T HE ISSUE OF DISALLOWANCE RAISED IN THE APPEAL IS PURELY OF ACAD EMIC IN NATURE AND CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, I DO NOT FIND IT FIT TO GIVE ANY SPECIFIC FINDINGS ON THE SAME. 4. IN VIEW OF THE FACT THAT THE ENTIRE INCOME OF T HE ASSESSEE BEING FROM MANUFACTURING ACTIVITIES WHICH IS ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT, EVEN IF ANY ADDITION IS MADE BY DISALLOWING CE RTAIN EXPENSES INVOKING THE PROVISIONS OF SECTION 40(A)(IA), IT WILL INCREA SE THE INCOME OF THE ASSESSEE BUT WILL BE SUBJECT TO DEDUCTION U/S 80IB OF THE ACT AND WILL NOT ATTRACT ANY TAX. THEREFORE, WE FEEL NO NEED TO INT ERFERE WITH THE ORDER PASSED BY LD. CIT(A) AND THE SAME IS HEREBY UPHELD. THIS GROUND OF THE REVENUE IS DISMISSED. ITA NOS.888, 884 & 885 OF 2008 A.Y.2005-06 4 5. IN THE RESULT, ALL THE THREE APPEALS OF THE REV ENUE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 30.05.2012 SD/- SD/- (ANIL CHATURVEDI) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY N.K. CHAUDHARY, SR. P.S. - 30 /05/2012 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. !' / CONCERNED CIT 4. !' - / CIT (A) 5. #$% , & , / DR, ITAT, AHMEDABAD 6. %'( )* / GUARD FILE. BY ORDER/ , + / , & ,