2010 (9) TMI 1053 - AT - Income Tax

Summary

Issues involved:
The judgment involves the issue of disallowance of deduction under section 80IA of the Income Tax Act, 1961 due to the appellant's failure to produce the final certificate of registration as an SSI unit.

Comprehensive Details:

1. The appellant's appeal arose from the Commissioner of Income-Tax (Appeals)-I, Baroda's order confirming the disallowance of deduction amounting to Rs. 7,29,876 claimed under section 80IA. The Assessing Officer (AO) rejected the claim as the appellant could not produce the final certificate of registration as an SSI unit.

2. The AO's decision was based on the appellant's failure to produce the registration certificate of the District Industries Centre, despite falling under the general category of SSI as declared by the Government of Gujarat. The AO held that registration was a prerequisite for claiming deduction under Section 80IA.

3. Before the first appellate authority, it was argued that the appellant was registered as an SSI unit with the DIC, and a provisional certificate was issued. The CIT(A) was not convinced, stating that the relevant certificate was not furnished, leading to the rejection of the claim.

4. Referring to a decision by the ITAT Ahmedabad in another case, it was noted that registration is not a precondition to avail the benefit of deduction under Section 80IB. The Tribunal confirmed findings in the appellant's sister concern case, where similar manufacturing activities were allowed deduction under Section 80IA.

5. The term "small-scale industrial undertaking" under Section 11B of the Industries (Development and Regulation) Act is crucial. The appellant, though lacking a final registration certificate, was regarded as an SSI unit by various departments. The Tribunal held that denial of the claim based on this technicality was unwarranted, directing the AO to allow the deduction.

6. Consequently, the appellant's appeal was allowed, emphasizing that the appellant should not be denied the claim of deduction under Section 80IA merely due to the absence of a final registration certificate.

Order pronounced in Open Court on 17th September 2010.