M/s. Ultra Polymers,, Daman v. The Income tax Officer, Vapi Ward-4, Daman

ITA 2991/AHD/2009 | 2005-2006
Pronouncement Date: 18-01-2010 | Result: Allowed

Appeal Details

RSA Number 299120514 RSA 2009
Bench Ahmedabad
Appeal Number ITA 2991/AHD/2009
Duration Of Justice 2 month(s) 12 day(s)
Appellant M/s. Ultra Polymers,, Daman
Respondent The Income tax Officer, Vapi Ward-4, Daman
Appeal Type Income Tax Appeal
Pronouncement Date 18-01-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 18-01-2010
Assessment Year 2005-2006
Appeal Filed On 06-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD DBENCH BEFORE DR. O.K. NARAYANAN VICE-PRESIDENT (AZ) AND SHRI MAHAVIR SINGH JUDICIAL MEMBER ITA NO.2991/AHD/2009 [ASSTT.YEAR:2005-06] M/S. ULTRA POLYMERS VS. INCOME TAX OFFICER SURVEY NO.338/1-C VAPI WARD-4 DAMAN NR. PATEL CRICKET GROUND KACHIGAM DAMAN PAN NO.AAFFU-8516F REVENUE BY: SHRI C.K. MISHRA SR. DR ASSESSEE BY: SHRI RAJESH M. UPADHYAY AR DATE OF ORDER RESERVED: 06/01/10 O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-I SURAT IN APPEAL NO.CAS-I (V)/62/08-09 DATED 28-07- 2009. THE ASSESSMENT WAS FRAMED BY THE ITO VAPI-WA RD=4 DAMAN U/S. 143(3) OF THE INCOME-TAX ACT 1961 (HEREINAFTER REF ERRED TO AS THE ACT) VIDE HIS ORDER DATED 20-12-2007 FOR THE ASSESSMENT YEAR 2005-06. 2. THE FIRST ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT(A) CONFIRMED THE DISALLOWANCE OF TDS MADE BY ASSESSING OFFICER. FOR THIS THE ASSESSEE HAS RAISED THE FOLLOWING GROUND NO.1 :- (1) LEARNED A.O HAS ERRED IN LAW AND ON FACTS TO D ISALLOW FOLLOWING BUSINESS EXPENSES ON THE VIEW THAT TDS LEVIABLE ON SUCH EXPENSES BEING NOT PAID SEC. 40A(IA) APPLIES ITA NO.2979/AHD/2009 A.Y. 2001-02 ACIT CIR-6 SURAT V. M/S. NANAVATI MOTORS PAGE 2 (A) LABOUR PROCESSING EXPENSES RS.1 13 834/- (B) SALES COMMISSION RS. 52 774/- LEARNED CIT (APPLS) HAS ALSO ERRED IN SUSTAINING D ISALLOWANCE MADE BY ITO. 3. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST ORDER OF CIT(A) IN CONFIRMING THE SUSTAINING DISALLOWANCE U/S.80IB OF THE ACT MADE BY THE ASSESSING OFFICER. FOR THIS THE ASSESSEE HAS RAIS ED THE FOLLOWING GROUND NO.2 :- (2) LEARNED A.O HAS DISALLOWED DONATION OF RS.4 000 /- AND DEPRECIATION OF RS.27 676/- LEARNED A.O HAS ERRED I N NOT ALLOWING DEDUCTION U/S.80IB OF INCOME INCREASED TO THAT EXTE NT OF DISALLOWANCE. 4. THE NEXT ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) IN CONFIRMING THE DEDUCTION U/S.80IB OF THE ACT MADE BY THE ASSESSING OFFICER. FOR THIS THE ASSESSEE HAS RAISED THE FOL LOWING GROUND NO.3 :- (3) DISALLOWANCE OF EXPENSES MADE BY ITO U/S.40A(IA ) AND SUSTAINED BY CIT (APPLS) MAY BE ALLOWED DEDUCTION U/S.80IB O F I.T. ACT 1961. 5. AT THE OUTSET THE LD. COUNSEL FOR THE ASSESSEE FAIRLY STATED THAT HE IS NOT PRESSING THE ABOVE THREE ISSUES ON MERITS BUT T HE ALTERNATIVE CLAIM OF THE ASSESSEE THAT THE DISALLOWANCE OF THESE EXPENSES SH OULD HAVE BEEN ALLOWED AS DEDUCTION U/S.80-IB OF THE ACT PROPORTIONATELY. HE STATED THAT THE LABOUR PROCESSING EXPENSES SALES COMMISSION DONATION AND DEPRECIATION ARE ARISING OUT OF THE INDUSTRIAL UNDERTAKINGS ENGAGED IN MANUFACTURING ACTIVITY SPECIFIED IN BACKWARD AREA OF DAMAN AND CONDITIONS FOR DEDUCTION U/S.80-IB OF THE ACT AS LAID DOWN IS ELIGIBLE FOR THE DEDUCTION AND THERE IS NO DISPUTE THAT THE UNIT IS COVERED UNDER THE PROVISIONS OF SECTION 80-IB OF THE ACT. ON QUERY FROM THE BENCH THE LD SR.DR STATED THAT THE ALTERN ATIVE PLEA OF THE ASSESSEE CAN BE ALLOWED AS THE DISALLOWANCE OF THESE EXPENSE S ARE MADE OUT OF THE DISALLOWANCE OF EXPENSES OUT OF THE INDUSTRIAL UNDE RTAKINGS ENGAGED IN MANUFACTURING ACTIVITY IN SPECIFIED BACKWARD AREA O F DAMAN. WE FIND THAT THIS ISSUE IS COVERED BY THE TRIBUNALS DECISION IN THE CASE OF M/S. STAMCOR V. ITO IN CO NO.105/AHD/2006 ARISING FROM ITA NO.1484/AHD/2003 VIDE ORDER DATED 01-02-2008 WHEREIN IT IS HELD AS UNDER:- ITA NO.2979/AHD/2009 A.Y. 2001-02 ACIT CIR-6 SURAT V. M/S. NANAVATI MOTORS PAGE 3 5. THE SECOND ISSUE IN THE CROSS OBJECTION OF THE ASSESSEE IS AS REGARDS TO CONFIRMATION OF DISALLOWANCE MADE BY THE ASSESSING OFFICER AT THE RATE OF 20% WITH RESPECT TO PAYMENT MADE TO LABOUR CONTRACTORS DISBURSED AMONG VARIOUS WORKERS ENGAGED IN MANUFACT URING ACTIVITY OF THE ASSESSEE. AS IN THE REVENUES APPEAL WE HAVE AL READY DECIDED THAT ASSESSEE IS ENTITLED U/S80IA FOR DEDUCTION WE FEEL THAT WHATEVER WILL BE DISALLOWED FROM THE MANUFACTURING ACTIVITY THAT WI LL BE ELIGIBLE FOR DEDUCTION U/S.80IA OF THE ACT. HENCE THIS BEING CO NSEQUENTIAL TO ALLOWANCE OF DEDUCTION U/S.80IA THE ASSESSEES CRO SS OBJECTION IS INFRUCTUOUS AND DISMISSED AS SUCH. WE FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE AS ABOVE. ACCORDINGLY WE ARE OF THE VIEW THAT WHATEVER EXPEN SES ARE DISALLOWED FROM THE MANUFACTURING ACTIVITY THAT WILL BE ELIGIBLE FR OM THE DEDUCTION U/S.80-IA OF THE ACT. ACCORDINGLY THE ALTERNATIVE PLEA OF THE A SSESSEE IS ALLOWED AND THIS ISSUE OF THE ASSESSEES APPEAL IS ALLOWED AS INDICA TED ABOVE. 6. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED ON THIS DAY OF 18 TH JANUARY 2010 SD/- SD/- (DR.O.K.NARAYANAN) (MAHAVIR SINGH) (VICE PRESIDENT) (JUDICIAL MEMBER) AHMEDABAD DATED : 18/01/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-IV SURAT 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD