Larson Colour Chem, Dist.Sabarkantha. v. The ACIT., Circle-4,, Ahmedabad

ITA 1750/AHD/2005 | 2001-2002
Pronouncement Date: 11-05-2010 | Result: Dismissed

Appeal Details

RSA Number 175020514 RSA 2005
Assessee PAN AABFL1073B
Bench Ahmedabad
Appeal Number ITA 1750/AHD/2005
Duration Of Justice 4 year(s) 9 month(s) 30 day(s)
Appellant Larson Colour Chem, Dist.Sabarkantha.
Respondent The ACIT., Circle-4,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 11-05-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 11-05-2010
Date Of Final Hearing 11-05-2010
Next Hearing Date 11-05-2010
Assessment Year 2001-2002
Appeal Filed On 12-07-2005
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI N.S. SAINI ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH JUDICIAL MEMBER DATE OF HEARING: 11.5.10 DRAFTED ON:11.05.2010 ITA NO.1750/AHD/2005 ASSESSMENT YEAR : 2001-2002 LARSON COLOUR CHEM. 2-B GANESHPURA OPP. JANTA PETROL PUMP MODASA DIST. SABARKANTHA VS. THE ASST. COMMISSIONER OF INCOME TAX CIRCLE-4 AHMEDABAD. PAN/GIR NO. : AABFL1073B (APPELLANT) .. (RESPONDENT) ITA NO.1759/AHD/2005 ASSESSMENT YEAR : 2001-2002 THE ASST. COMMISSIONER OF INCOME TAX CIRCLE-4 AHMEDABAD. VS. LARSON COLOUR CHEM. 2-B GANESHPURA OPP. JANTA PETROL PUMP MODASA DIST. SABARKANTHA PAN/GIR NO. : AABFL1073B (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI D.K.PARIKH RESPONDENT BY: SHRI DR. JAYANT JAVERI SR. D.R. O R D E R PER N.S.SAINI ACCOUNTANT MEMBER :- THESE ARE THE CROSS APPEAL FILED BY THE REVENUE A ND ASSESSEE AGAINST THE ORDER OF THE LD.CIT(APPEALS)-VIII AHM EDABAD DATED 13.05.2005. 2. GROUND OF THE APPEAL OF THE ASSESSEE READS AS UN DER:- 1. THE LEARNED C.I.T.(A) HAS ERRED IN CONFIRMING A N AMOUNT OF RS.5 33 000/- BEING SUBSIDY RECEIVED FROM THE GOVER NMENT AS INCOME. IT IS SUBMITTED THAT THE SUBSIDY HAS BEEN R ECEIVED BY - 2 - THE APPELLANT FROM THE GOVERNMENT FOR SETTING UP AN D ENCOURAGING INDUSTRY IN BACKWARD AREA. IT IS IN THE NATURE OF CAPITAL RECEIPT. IT IS NOT AT ALL IN THE NATURE OF INCOME EITHER INCOME FROM BUSINESS OR PROFESSION OR INCOME FROM O THER SOURCES. IT IS SUBMITTED THAT THE ADDITION CONFIRME D BY THE C.I.T.(A) OF RS.5 33 000/- TREATING SUBSIDY AS INCO ME OF THE APPELLANT IS INCORRECT BOTH ON FACTS AND ON LAW AND THE SAME BE DELETED OR BE ALLOWED TO BE REDUCED FROM THE COS T OF ASSETS. 2. THE LEARNED C.I.T.(A) HAS ERRED IN CONFIRMING DI SALLOWANCE OF DEPRECIATION OF RS 4 93 196/- THE LEARNED C.I.T.(A ) HAS CONFIRMED DISALLOWANCE OF DEPRECIATION ON THE GROUN D THAT THERE EXISTED NO INDUSTRIAL UNDER TALKING AND THERE EXISTED NO PLANT AND MACHINERY IN THE NEWLY ESTABLISHED INDUST RIAL UNDERTAKING. IT IS SUBMITTED THAT THE ASSESSEE HAS PURCHASED PLANT AND MACHINERY. THE SAID PLANT AND MACHINERY W ERE INSTALLED AND USED FOR THE PURPOSE OF BUSINESS AND WERE ALSO FOUND IN EXISTENCE ON SURVEY WHICH WAS CONDUCTED B Y THE INCOME TAX AUTHORITIES. IT IS SUBMITTED THAT THE ASSESSEE HAS OWNED PLANT AND MACHINERY AND THE SAME WERE USED FO R THE PURPOSE OF BUSINESS AND ON FACTS AND CIRCUMSTANCES OF THE CASE DEPRECIATION OF RS . 4 93 196/- BE ALLOWED. 3. THE LEARNED C.I.T.(A) HAS ERRED IN CONFIRMING DI SALLOWANCE OF RS.50 000/- BEING CHARITY AND DONATION. IT IS SU BMITTED THAT THE SAME BE ALLOWED EITHER AS EXPENDITURE OR ALTERN ATIVELY UNDER CHAPTER-VIA OF THE ACT. 4 THE LEARNED C.I.T.(A) HAS ERRED IN CONFIRMING DIS ALLOWANCE OF THE CLAIM OF DEDUCTION U/S.80IB OFF THE INCOME TAX ACT ON THE GROUND THAT THE ASSESSEE WAS NOT HAVING THE PLANT A ND MACHINERY FOR THE GOODS PRODUCED AND MANUFACTURED A ND THAT THERE WAS NO NEWLY ESTABLISHED INDUSTRIAL UNDERTAKI NG. IT IS SUBMITTED THAT THE ASSESSEE HAD ESTABLISHED NEWLY I NDUSTRIAL UNDERTAKING NEW PLANT AND MACHINERY WERE INSTALLED SUCH PLANT AND MACHINERY WERE USED FOR THE PURPOSE OF PR ODUCTION VARIOUS CHEMICALS HAVE BEEN PRODUCED AND SOLD SALES HAVE BEEN ACCEPTED AS GENUINE AND HAVE NOT BEEN DOUBTED. IN VIEW OF THIS IT IS SUBMITTED THAT THERE IS NO BASIS OR J USTIFICATION FOR REJECTING THE CLAIM OF THE APPELLANT. - 3 - WITHOUT PREJUDICE TO THE ABOVE IT IS SUBMITTED THAT THERE IS NO JUSTIFICATION IN CONFIRMING THE REJECTION OF THE CL AIM OF DEDUCTION U/S 80IB ON ITS ENTIRE INCOME EARNED FRO M THE NEWLY ESTABLISHED INDUSTRIAL UNDERTAKING AS EXAMINE D ON TOTALLY BASELESS AND IMPROPER GROUND. THE ASSESSEE HAD SUPPLIED SUFFICIENT MATERIALS AND EVIDENCE TO CONCL USIVELY PROVE THAT THE ASSESSEE HAS EARNED INCOME FROM NEWL Y ESTABLISHED INDUSTRIAL UNDERTAKING AND HAS FULFILLE D ALL THE CONDITIONS THAT ARE REQUIRED FOR CLAIMING AND AVAIL ING DEDUCTION U/S.80IB. IT IS SUBMITTED THAT AS THE ASS ESSEE HAS COMPLIED WITH ALL THE TERMS AND CONDITIONS LAID DOW N U/S 80IB DEDUCTION U/S.80IB BE ALLOWED AND THE INCOME EARNED FROM NEWLY ESTABLISHED INDUSTRIAL UNDERTAKING BE GRANTED DEDUCTION AT 100% AS ENVISAGED UNDER THE SAID SECTION. GROUNDS OF THE APPEAL OF THE REVENUE READS AS UNDER :- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF INTEREST WHILE OBSERVING IN PARA 2. 2. OF THE ORDER THAT THE BORROWED FUNDS HAVE BEEN UTILIZED FO R THE SAID ADVANCES. AS SUCH THE DISALLOWANCE OF INTEREST SHO ULD HAVE BEEN UPHELD. 3. THE LEARNED AUTHORISED REPRESENTATIVE OF THE AS SESSEE SUBMITTED THAT THE ASSESSEE FILED APPLICATION BEFOR E THE SETTLEMENT COMMISSIONER WHICH HAS BEEN ADMITTED FOR HEARING VI DE ORDER DATED 27.10.2006 PASSED UNDER SECTION 245D(1) OF THE ACT. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE AND THE REVENUE IN THEIR RESP ECTIVE APPEAL BEFORE THE TRIBUNAL ARE NOW BEFORE THE SETTLEMENT COMMISSION F OR THEIR ADJUDICATION. THEREFORE THE APPEAL OF THE ASSESSEE AND REVENUE A RE LIABLE TO BE DISMISSED AS INFRUCTOUS. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE ALSO AD MITTED THAT IN VIEW OF THE CASE BEING ADMITTED BY THE SETTLEMEN T COMMISSION AND - 4 - DISPUTES IN THESE APPEALS ARE TO BE RESOLVED BY THE SETTLEMENT COMMISSION BOTH THE APPEALS ARE LIABLE TO BE DISMISSED BY THE TRIBUNAL. 5. IN VIEW OF THE ABOVE ADMISSION BY BOTH THE PART IES WE DISMISS THE APPEAL OF THE ASSESSEE AS WELL AS OF THE REVENU E IN LIMINE. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE AND R EVENUE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING IN THE PRESENCE OF THE PARTIES ON 11 TH DAY OF MAY 2010. SD/- SD/- ( MAHAVIR SINGH) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; ON THIS 11 TH DAY OF MAY 2010 PARAS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-VIII AHMEDABAD. 5. THE DR AHMEDABAD BENCH 6. THE GUAR D FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 11.05.2010 -------------- ----- 2. DRAFT PLACED BEFORE AUTHORITY 11.05.2010 ---- --------------- 3. DRAFT PROPOSED & PLACED 11.05.2010 ----------- -------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 12.05.2010 ---------- --------- JM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 12.05.2010 -------- ------------ 6. KEPT FOR PRONOUNCEMENT ON ---------------- -- ------------------ 7. FILE SENT TO THE BENCH CLERK 12.05.2010 ------ -------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- -- -------------------