The ITO, Vapi Ward-4, Nani Daman V. M/s. Chirag Plast, Nani Daman

ITA 893/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76791 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 23-05-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 25-03-2011
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Assessee Lawyers: SAKAAR SHARMA
• Section: 80IB

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD 0 00 0 0 00 0 , , , , !'# !$ !'# !$ !'# !$ !'# !$0 00 0! !! !0 00 0 %$ %$ %$ %$, , , , &' ( &' ( &' ( &' ( & & & & BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO. 893/AHD/2011 ASSESSMENT YEAR 2007-08 INCOME TAX OFFICER, VAPI WARD-4, DAMAN. VS M/S CHIRAG PLAST, PLOT NO. 145/5, JALARAM INDL. ESTATE, NR. MAHATMA GANDHI UDYOGNAGAR, DABHEL, NANI DAMAN. PAN: AADFC3525H )*/ APPELLANT ,-)* / RESPONDENT REVENUE BY : SHRI P.L. KUREEL, SR. DR ASSESSEE(S) BY : SHRI SAKAAR SHARMA, AR $'. / 0'/ // / DATE OF HEARING : 23/05/2014 123 / 0' / DATE OF PRONOUNCEMENT : 30/05/2014 &4 &4&4 &4/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), VALSAD DATED 20.12.2010. 2. THE SOLE GROUND OF APPEAL OF THE REVENUE IS THA T THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN ALLOW ING DEDUCTION U/S. 80IB OF THE INCOME TAX ACT ON SCRAP SALES OF RS 11,18,90 6/-. ITA NO. 893/AHD/2011 M/S CHIRAG PLAST, NANI DAMAN. FOR A.Y. 2007-08 - 2 - 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS ING OFFICER OBSERVED THAT THE ASSESSEE HAD SOLD SCRAP GENERATED DURING THE COURSE OF MANUFACTURING PROCESS OF RS 11,18,906/- AND CLAIMED IT TO BE INCOME DERIVED FROM MANUFACTURING ACTIVITY AND CLAIMED IT ELIGIBLE FOR DEDUCTION U/S. 80IB OF THE INCOME TAX ACT, 1961. THE ASSESSING OF FICER REJECTED THE CLAIM OF THE ASSESSEE AND TREATED THE INCOME FROM SALE OF SCRAP AS NOT DERIVED FROM MANUFACTURING OPERATIONS IN VIEW OF THE DECISI ON OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. PANDIAN CHEMIC ALS LIMITED 262 ITR 278, CAMBAY ELECTRIC SUPPLY INDUSTRIAL UNDERTAKING VS. CIT 113 ITR 84 AND THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF ACIT VS. ABBAS WAZIR P. LIMITED 179 ITR 811. 4. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPE ALS) ALLOWED THE CLAIM FOR DEDUCTION ON SCRAP SALES MADE BY THE ASSESSEE WHICH WAS GENERATED OUT OF MANUFACTURING PROCESS OF THE ASSES SEE BY FOLLOWING THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF DCIT VS. HARJIVANDAS JUTHABHAI ZAVERI & OTHERS 258 ITR 785. 5. THE DEPARTMENTAL REPRESENTATIVE SUPPORTED THE O RDER OF THE ASSESSING OFFICER. 6. ON THE OTHER HAND, THE AUTHORIZED REPRESENTATIV E OF THE ASSESSEE SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. THE UNDISPUTED FACTS OF THE CASE ARE THAT DURING THE YEAR UNDER CONSIDERATI ON THE ASSESSEE MADE SALE OF SCRAP OF RS 11,18,906/- WHICH WAS GENERATED DURING THE COURSE OF MANUFACTURING PROCESS AND CLAIMED DEDUCTION U/S. 80 IB OF THE ACT ON THE ITA NO. 893/AHD/2011 M/S CHIRAG PLAST, NANI DAMAN. FOR A.Y. 2007-08 - 3 - SAME. THE ASSESSING OFFICER WAS OF THE VIEW THAT A S THE SALE OF SCRAP WAS NOT DERIVED FROM MANUFACTURING OPERATIONS THE ASSES SEE WAS NOT ENTITLED TO DEDUCTION U/S. 80IB OF THE ACT. THE COMMISSIONER O F INCOME TAX (APPEALS) FOLLOWING THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF HARJIVANDAS JUTHABHAI ZAVERI & OTHERS (SUPRA) WHERE IN IT WAS HELD THAT SCRAP SALE IS AN INCOME DERIVED FROM THE INDUSTRIAL UNDERTAKING, ALLOWED THE CLAIM OF THE ASSESSEE. THE DEPARTMENTAL REPRESENTA TIVE HAS NOT POINTED OUT ANY SPECIFIC ERROR IN THE ORDER OF THE COMMISSI ONER OF INCOME TAX (APPEALS). HE HAS ALSO NOT CITED ANY CONTRARY DECI SION TO THAT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF HARJIVANDA S JUTHABHAI ZAVERI & OTHERS (SUPRA) WHICH WAS RELIED UPON BY THE COMMISS IONER OF INCOME TAX (APPEALS) FOR ALLOWING DEDUCTION U/S. 80IB ON SALE OF SCRAP TO THE ASSESSEE. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS) WHICH IS CONFIRMED AND THE GRO UND OF APPEAL OF THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 30 TH OF MAY, 2014 AT AHMEDABAD. SD/- SD/- (G.C. GUPTA) VICE PRESIDENT ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 30/05/2014 GHANSHYAM MAURYA, SR. P.S.