ITO, Noida v. M/s. Prisma Electronics, Noida

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI I.P.BANSAL JM AND SHRI R.C.SHARMA AM ITA NO.500/DEL/2010 ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER WARD-3 NOIDA. VS. M/S PRISMA ELECTRONICS B-14 PHASE-II NOIDA. PAN NO.AAFFP7026A. (APPELLANT) (RESPONDENT) APPELLANT BY : MRS.BANITA DEVI NAREON SR.DR. RESPONDENT BY : SHRI AJAY VOHRA & SHRI SACHIT JOLLY ADVOCATES. ORDER PER R.C.SHARMA AM : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 4.11.2009 FOR THE AY 2006-07 WHEREIN REVENUE IS AG GRIEVED FOR ALLOWING DEDUCTION TO THE ASSESSEE U/S 80IB OF THE IT ACT. 2. AT THE OUTSET LEARNED AR PLACED ON RECORD THE O RDER OF ITAT IN ASSESSEES OWN CASE FOR THE IMMEDIATELY PRECEDING AY 2005-06 WHEREIN EXACTLY SIMILAR ISSUE WAS DEALT WITH BY THE TRIBUNAL. 3. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE WHEREIN ASSESSEES CLAIM FOR DEDUCTION U/S 80 IB ON THE EXACTLY SIMILAR GROUND WAS ALLOWED AFTER HAVING THE FOLLOWING OBSER VATION:- 3. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CA REFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. U/S 8 0IB DEDUCTION IS ALLOWED TO SMALL SCALE INDUSTRIAL UNDERTAKING WHICH BEGINS ITA-500/DEL/2010 2 MANUFACTURE OR PRODUCE ARTICLE AT ANY TIME DURING T HE PERIOD BEGINNING ON 1 ST APRIL 1995 AND ENDING ON 31 ST MARCH 2002. AS PER SUB-SECTION (2) NO DEDUCTION WILL BE ALLOWED TO AN INDUSTRIAL UNDERTAKING WHICH IS FORMED BY SPLITTING UP OR THE RECONSTRUCTION OF A BUSINESS ALREADY IN EXISTENCE AND THAT IT IS NOT FORMED BY TRANSFER TO A NEW BUSINESS OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE. IN THE INSTANT CASE ASSESSEE FIRM WAS EN GAGED IN MANUFACTURE OF ELECTRONIC DURABLES IN PROPRIETORSHI P CAPACITY. HOWEVER THE CONSTITUTION OF THE ASSESSEE FIRM CHAN GE BY ADMISSION OF A PARTNER THEREIN. THE CLAIM OF DEDUCTION U/S 8 0IB WAS FILED BY THE ASSESSEE PARTNERSHIP FIRM IN AY 2005-06 WHICH W AS DECLINED BY THE AO ON THE PLEA THAT THERE WAS TRANSFER OF PLANT AND MACHINERY ALREADY IN USE IN THE BUSINESS OF PROPRIETORSHIP FI RM. HOWEVER THERE WAS NO TRANSFER OF PLANT AND MACHINERY AS ALLEGED B Y THE AO. ON THE CONVERSION OF PROPRIETORSHIP FIRM INTO PARTNERSHIP FIRM THERE WAS NO TRANSFER OF PLANT AND MACHINERY TO THE NEW FIRM BUT IT WAS TRANSFER OF INDUSTRIAL UNDERTAKING AS A WHOLE ALONGWITH ALL THE ASSETS AND LIABILITIES. NEITHER THERE WAS ANY SPLITTING UP NO R RECONSTRUCTION OF BUSINESS ALREADY IN EXISTENCE BUT IT WAS A CASE OF CHANGE IN THE CONSTITUTION OF THE SAME INDUSTRIAL CONCERN WHICH C ONTINUED TO MANUFACTURE THE SAME ITEM EVEN AFTER ADMISSION OF A PARTNER. THUS BOTH THE CONDITIONS WHICH DISQUALIFY THE DEDUCTION ARE NOT PRESENT IN THE INSTANT CASE. WE THEREFORE DO NOT FIND ANY INF IRMITY IN THE ORDER OF CIT(A) FOR ALLOWING CLAIM FOR DEDUCTION U/S 80IB FOR THE REMAINING PERIOD OF ITS ELIGIBILITY. 4. AS THE FACTS AND CIRCUMSTANCES DURING THE YEAR U NDER CONSIDERATION ARE IN PARI-MATERIA RESPECTFULLY FOLLOWING THE ORDER OF T HE TRIBUNAL IN ASSESSEES OWN CASE AS WELL AS THE FINDING RECORDED BY THE CIT(A) WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). 5. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 1 ST APRIL 2010. SD/- SD/- (I.P.BANSAL) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 01.04.2010. VK. ITA-500/DEL/2010 3 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT DEPUTY REGISTRAR