2014 (3) TMI 98 - AT - Income Tax

Deletion of deduction u/s 80IB of the Act SSI Exemption Limit of investment - Held that - The appellant company provisionally registered as SSI on 23/07/1999, as per press note/circular of Commerce and Industries the limit of Investment in plant & applicable to the unit is Rs. 300 lacs and not Rs, 100 lacs - the computation of eligible plant and machinery is of Rs, 1,28,49,101/-, which is below the limit of Rs, 3 crores the decision in ACIT v/s Shiv Agrevo Ltd. 2009 (2) TMI 252 - ITAT JAIPUR-B followed - the appellant company fulfills the conditions of SSI during the asst. year 2006-07 thus, there is no need to interfere with the order passed by the CIT(A) in holding that assessee-company fulfils the condition of SSI during the assessment year and are entitled to deduction u/s 80IB of the Act - Decided against Revenue.

Summary

Issues:
- Disallowance of deduction u/s 80IB of the Income Tax Act, 1961.

Analysis:
The case involved an appeal by the Revenue against the order of the Ld. CIT(A) Gandhinagar regarding the disallowance of a deduction u/s 80IB of the Income Tax Act, 1961. The assessing officer had observed that the aggregate value of plant and machinery exceeded the monetary limit of Rs. 1 crore, leading to the withdrawal of the deduction claim u/s 80IB. However, the Ld. CIT(A) directed the assessing officer to grant the deduction after considering various submissions and evidence provided by the appellant company.

The Ld. CIT(A) noted that the appellant company had obtained provisional registration as a Small Scale Industrial undertaking from the Director of Industries, Govt of Gujarat, and met the conditions stipulated for the claim of deduction u/s 80IB. The appellant company's investment in eligible plant and machinery was within the prescribed limits and did not exceed Rs. 3 crores, as per the relevant provisions. The Ld. CIT(A) referred to notifications and circulars to support the appellant company's eligibility for the deduction.

The Ld. CIT(A) further highlighted that the appellant company had received certification from the District Industries Center as a Permanent Small Scale Industrial undertaking for specific manufacturing activities. Based on these findings, the Ld. CIT(A) concluded that the appellant company fulfilled the conditions of a Small Scale Industry during the assessment year in question and was entitled to the deduction u/s 80IB of the Income Tax Act.

The Tribunal upheld the order of the Ld. CIT(A), stating that there was no dispute regarding the value of plant and machinery being within the prescribed limits and that the appellant company met the criteria for a Small Scale Industry. Therefore, the Tribunal dismissed the appeal of the Revenue, affirming the decision to allow the deduction u/s 80IB for the appellant company.