IOT Anwesha Engineering & Cosntruction Ltd., Baroda v. The Dy.CIT.,Circle-1(1),, Baroda

ITA 3052/AHD/2010 | 2005-2006
Pronouncement Date: 11-10-2013 | Result: Allowed

Appeal Details

RSA Number 305220514 RSA 2010
Assessee PAN AABCA9599A
Bench Ahmedabad
Appeal Number ITA 3052/AHD/2010
Duration Of Justice 2 year(s) 11 month(s)
Appellant IOT Anwesha Engineering & Cosntruction Ltd., Baroda
Respondent The Dy.CIT.,Circle-1(1),, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 11-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 11-10-2013
Date Of Final Hearing 27-09-2013
Next Hearing Date 27-09-2013
Assessment Year 2005-2006
Appeal Filed On 11-11-2010
Judgment Text
ITA NOS. 305 2 & 3053/AHD/2 010 . A.Y. 2005-0 6 & 06- 07 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI A.M.) I.T. A. NOS. 3052 & 3053 /AHD/2010 (ASSESSMENT YEAR : 2005-06 06-07) IOT ANWESHA ENGINEERING & CONSTRUCTION LTD. E-604 KALPAVRUS OPP. GEB SUB STATION GOTRI ROAD BARODA (APPELLANT) VS. THE D.C.I.T.CIRCLE-1(1) BARODA (RESPONDENT) PAN: AABCA9599A APPELLANT BY : SHRI M.K. PATEL. A.R. RESPONDENT BY : SHRI O.P. BATHEJA SR. D.R. ( )/ ORDER DATE OF HEARING : 27-09-2013 DATE OF PRONOUNCEMENT : 11 -10-2013 PER SHRI ANIL CHATURVEDI A.M. 1. THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)- 1 BARODA DATED 20.08.2010 & 18.08.2010 FOR A.Y. 20 05-06 AND A.Y. 06- 07 RESPECTIVELY. 2. AT THE OUTSET BOTH THE PARTIES SUBMITTED THAT THE I SSUE INVOLVED IN BOTH THE APPEALS ARE IDENTICAL EXCEPT FOR THE AMOUNT. IT WA S FURTHER SUBMITTED THAT ITA NOS. 305 2 & 3053/AHD/2 010 . A.Y. 2005-0 6 & 06- 07 2 THE SUBMISSIONS MADE BY THEM FOR ONE YEAR WOULD BE EQUALLY APPLICABLE TO THE OTHER. WE THEREFORE PROCEED WITH THE FACTS FOR A.Y. 05-06. 3. THE FACTS AS CULLED OUT FROM THE ORDERS OF LOWER AU THORITIES ARE AS UNDER; 4. ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MA NUFACTURING AND FABRICATION OF PLANT AND EQUIPMENTS STORAGE TANKS AND PIPING ETC. AND ERECTIONING THE SAME AT THE SITE OF THE CUSTOMERS. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2005-06 ON 25.10.2005 SHOWING TO TAL INCOME OF RS. 39 66 727/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED U/S 143(3) VIDE ORDER DATED 1 8.12.2007 AND THE TOTAL INCOME WAS DETERMINED AT RS. 73 57 930/-. AG GRIEVED BY THE ORDER OF A.O. ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) VIDE ORDER DATED 20.08.2010 GRANTED PARTIAL RELIEF TO THE ASSE SSEE. AGGRIEVED BY THE AFORESAID ORDER OF CIT(A) THE ASSESSEE IS NOW IN A PPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUND. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. A.O. ERRED IN DISALLOWING AND THE LD. COMMISSIONER OF INCOME TAX (APPEALS)- I ERRED IN CONFIRMING THE DISALLOWANCE OF DEDUCTION U/S. 80IB OF THE ACT AMOUNTING TO RS. 14 98 683/-. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS A.O. N OTICED THAT THE ASSESSEE HAD CLAIMED DEDUCTION UNDER 80IB IN RESPEC T OF ITS UNIT CLAIMING IT TO BE SMALL SCALE INDUSTRY. A.O. FURTH ER NOTICED THAT AS PER THE BALANCE SHEET OF THE ASSESSEE THE GROSS BLOCK OF P LANT AND MACHINERY WAS RS. 1.55 CRORES. HE WAS OF THE VIEW THAT AS PER THE DEFINITION OF INDUSTRIAL DEVELOPMENT AND REGULATION ACT 1951 A UNIT CAN BE ITA NOS. 305 2 & 3053/AHD/2 010 . A.Y. 2005-0 6 & 06- 07 3 CONSIDERED TO BE SMALL SCALE INDUSTRIAL UNDERTAKING ONLY IF THE INVESTMENTS IN PLANT AND MACHINERY DID NOT EXCEED R S. 1 CRORE. HE FURTHER NOTICED THAT IN THE ASSESSEES OWN CASE FOR A.Y. 04-05 AND FOLLOWING THE ORDER FOR A.Y. 04-05 THE CLAIM OF DED UCTION WAS DISALLOWED. HE THEREFORE FOLLOWING THE DECISION IN EARLIER YEARS DISALLOWED THE CLAIM OF DEDUCTION UNDER 80IB OF RS. 14 98 683/-. AGGRIEVED BY THE ORDER OF A.O. ASSESSEE CARRIED TH E MATTER BEFORE CIT(A). CIT(A) UPHELD THE ORDER OF A.O. BY HOLDING AS UNDER:- 4.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE THE SUBMISSIONS OF THE APPELLANT AND THE ASSESSMENT ORDER. IT MUST BE SEE N THAT THE APPELLANT HAS ON ITS OWN INDICATED IN THE RETURN THAT THE VALUE OF PLANT AND MACHINERY EXCEEDED THE QUALIFYING LIMIT OF RS. 1 CRORE AND ON BEING QUESTI ONED IT WAS CLARIFIED THAT THE BREAK-UP OF PLANT & MACHINERY AND TOOLS AND TACKLES IS AS UNDER:- PLANT AND MACHINERY : RS. 8269917/- TOOLS AND TACKLES : RS. 7196098/- TOTAL : RS. 15465715/- 4.3.1 THE DETAILS OF PLANT AND MACHINERY TOOLS &. TACKLES ARE OUTLINED AT PAGES 2 TO 6 OF THE ASSESSMENT ORDER. COMING TO THE CONTENT ION OF THE APPELLANT THAT HYDRAULIC JACKS ARE PURCHASED IN LOTS NEITHER THER E WAS SUCH CLASSIFICATION INDICATED IN THE DETAILS FURNISHED BEFORE THE AO N OR THERE WAS SUCH REFERENCE DURING THE ASSESSMENT/APPEAL PROCEEDINGS. IN THE IN STANT AY ALSO THERE WAS A FRESH PURCHASE OF HYDRAULIC JACKING EQUIPMENT FOR R S. 759200/-. IT IS ALSO NOTICED THAT PUG CUTTING MACHINE HACKSAW MACHINE AND WELDI NG MACHINES ARE CLASSIFIED UNDER PLANT AND MACHINERIES WHEREAS DRILLING MACHIN ES GENERATOR HYDRAULIC JACK AND ANGLE GRINDERS ARE CLASSIFIED AS TOOLS AND TACKLES. THE ANGLE GRINDERS DRILLING MACHINES AND HYDRAULIC JACK ARE NOTHING BU T MACHINERIES AND IT APPEARS THAT THE APPELLANT HAS ARBITRARILY CLASSIFIED MACHI NERY ITEMS INTO PLANTS TOOLS & TACKLES TO FALL WITHIN THE SSI LIMIT AND THERE IS N O SCIENTIFIC BASIS OR JUSTIFICATION FOR SUCH REPRESENTATION OF PLANT AND MACHINERY OR D ETAILS. EVEN IF THE CONTENTION OF THE APPELLANT THAT FOR AY 04-05 THE HYDRAULIC JA CKS WERE PURCHASED ACTUALLY IN LOTS AND NOT A SINGLE MACHINE IS ACCEPTED THERE AR E LARGE NUMBER OF OTHER ITEMS SUCH AS HYDRAULIC POWER PACK DRILL MACHINE PAPER MACHINE ANGLE GRINDERS AIR COMPRESSOR MOISTURE SEPARATOR GENERATOR SET WHIC H ARE CLEARLY IN THE NATURE OF PLANT AND MACHINERY AND IF THE VALUE OF THESE ITEMS CLUBBED WITH THE INDICATED PLANT AND MACHINERY VALUATION THE TOTAL VALUE WOULD EXCEED RS. 1 CRORE AND THUS THE APPELLANT DOES NOT QUALIFY FOR DEDUCTION U/S. 8 0IB. ITA NOS. 305 2 & 3053/AHD/2 010 . A.Y. 2005-0 6 & 06- 07 4 6. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE IS N OW IN APPEAL BEFORE US. 7. BEFORE US THE LD. A.R. AT THE OUTSET SUBMITTED THA T THE FACTS OF THE CASE IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF EARL IER YEAR. HE FURTHER SUBMITTED THAT FOR A.Y. 04-05 THE HON. TRIBUNAL HA D RESTORED THE ISSUE TO THE FILE OF A.O. WITH DIRECTIONS TO DECIDE THE ISSU E AFRESH. HE PLACED ON RECORD THE COPY OF ORDER IN ITA NO. 3225/AHD/2008 ORDER DATED 03.02.2012. HE THEREFORE SUBMITTED THAT SINCE THE FACTS OF THE CASE THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF EARLIER YEAR FOLLOWING THE ORDER FOR A.Y. 04-05 THE MATTER BE RESTORED TO A.O FOR V ERIFICATION AND WITH NECESSARY DIRECTIONS. 8. THE LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF A.O. AND CIT(A). 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT FOR A.Y. 2004-05 THE ASSESSEE WAS DIS ALLOWED DEDUCTION UNDER 80IB AS THE ASSESSEES UNIT WAS NOT CONSIDERE D TO BE SMALL SCALE INDUSTRIAL UNIT. THE CO-ORDINATE BENCH OF TRIBUNAL WHILE DECIDING THE APPEAL IN ITA NO. 3225/AHD/2008 (SUPRA) RESTORED TH E MATTER TO THE FILE OF A.O. BY HOLDING AS UNDER:- 4. WE HAVE CONSIDERED SUBMISSIONS OF BOTH THE PARTIES. IN THE FACTS OF THE CASE WE ARE OF THE CONSIDERED VIEW THAT SINCE THE REPORT OF THE EXPERT DATED 14-6-2007 GIVING THE VALUATION REPORT OF THE MACHINERY EQUIPMENT/ TOOLS AND TACKLES WAS NOT FILED BY THE ASSESSEE BEFORE THE AO AND THAT THE CONTENTS OF THE EXPERT'S REPORT GO TO THE ROOT OF THE ISSUE OF DISALLOWANCE MADE UNDER SECTION 80IB T HAT WHETHER THE ASSESSEE WAS A SMALL SCALE INDUSTRIAL UNDERTAKING AND ACCORDINGLY IT SHALL BE IN THE INTEREST OF THE JUSTICE TO RESTORE THE ISSUE TO THE FILE OF THE AO WITH DIRECTION TO DECIDE THE SAME AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING ADEQU ATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE DIRECT ACCORDINGLY . ITA NOS. 305 2 & 3053/AHD/2 010 . A.Y. 2005-0 6 & 06- 07 5 10. BEFORE US SINCE THE ASSESSEE HAS SUBMITTED THAT TH E FACTS OF THE CASE IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF A.Y. 04-05 AND SINCE THE REVENUE COULD NOT CONTROVERT THE AFORESAID SUBMISSI ON OF THE ASSESSEE WE FOLLOWING THE DECISION OF CO-ORDINATE BENCH IN A SSESSEES OWN CASE WITH SIMILAR DIRECTIONS RESTORE THE MATTER TO THE F ILE OF A.O AND DIRECT HIM TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW A FTER PROVIDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. IN THE RESU LT THIS GROUND OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 11. THUS THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTI CAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 11-10 - 2013. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR. ITAT AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT AH MEDABAD