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TMI Blog2013 (5) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... n the activities of the assessee as compared to the said earlier year, therefore, the Assessing Officer was not justified in denying the claim of the assessee - ITA No. 347/JU/2012 - - - Dated:- 1-5-2013 - Shri Hari Om Maratha And Shri N. K. Saini,JJ. For the Appellant : Shri G. R. Kokani For the Respondent : Shri Kishan Goyal ORDER Per N. K. Saini, A.M. This appeal by the assessee is directed against the order of CIT(A), Jodhpur dated 10.7.2012. 2. Following grounds have been raised in this appeal: Under the facts and circumstances of the case that the Ld. CIT(A) has erred in (i) allowing the deduction u/s 80IB ignoring the fact that the A undertaking has not fulfilled the condition laid under sub-Section (2) of section 80IB as discussed by the Assessing Officer; (ii) deleting the disallowance of Rs. 19,70,650/- made u/s 80IB without appreciating the fact that the assessee has failed to show any congruence in consumption of power with its claimed manufacturing activities, as very low electrical expenses were debited to profit and loss account leading the Assessing Officer to conclude that goods have been largely traded, as manufacturing on such larg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0IB(2) of the Act and was eligible for deduction u/s 80IB of the Act. He therefore, directed the Assessing Officer to allow deduction u/s 80IB of the Act as claimed. Now the department is in appeal. 6 During the course of hearing the Ld. Counsel for the assessee at the very outset stated that this issue is covered in favour of the assessee vide paras No. 9 in case of ITO Ward Balotra V. M/s Deepak Swadeshi Mills, Balotra in ITA No. 219 220/JU/2011 and ITA No. 103/JU/2012 for Assessment years 2005-06, 2007-08 and 2008-09. 7 The Ld. D.R. for the Revenue although supported the order of the Assessing Officer but could not controvert the aforesaid contention of the Ld. Counsel for the assessee. 8 After considering the submissions of both the parties and the material on record, it is noticed that the similar issue having identical facts, came up for consideration of the Tribunal in the case of ITO, Balootra Vs. M/s Deepak Swadeshi Mills, Balotra in ITA No. 219 220/JU/2011 and ITA No. 103/JU/2012 for Assessment years 2005-06, 2007-08 and 2008-09 and the relevant observations of the Tribunal in the order dated 11.2.2013 are given as under: 9. After considering the rival submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t any time previous to the date of the installation by the assessee, used in India; (b) such machinery or plant is imported into India from any country outside India; and (c) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee. Explanation 2. Where in the case of an industrial undertaking, any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does !not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with; (iv) in a case where the industrial undertaking manufactures or produces articles or things, the undertaking employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the preceding year has allowed the claim of the assessee for deduction u/s 80IB of the Act by considering that the assessee was engaged in manufacturing activities. Moreover, the various government authorities such as Central Excise, Industrial Department, ESI authorities etc. have accepted by issuing the various certificates that the assessee is an industrial undertaking engaged in the business of manufacturing or production of finished product namely poplin out of grey cloth, which is a different article or thing from the raw material, therefore, the assessee also fulfilled the third condition laid down in section 80IB (2) of the Act. The fourth and last condition provides that the industrial undertaking must employ 10 or more workers, if manufacturing process is carried out with the aid of power or employ 20 or more workers if the manufacturing process is without aid of power. In the present case, the ld CIT(A) after verifying from the wages register found that 12 workers were working continuously form April, 2004 to the end of the Financial Year relevant to assessment year under consideration. Therefore, the assessee fulfilled the condition of employing more than 10 wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o accepted the sale of the finished goods shown by the assessee, so there was no reason to deny the claim of deduction u/s 80-IB(5) of the Act when the assessee fulfilled all the conditions laid down in the provisions of section 80IB(2) of the Act. In the present case, the Assessing Officer although alleged that the assessee might have purchased a finished product from other sources and did not manufacture in its unit, however, the purchase of grey cloth which is a raw material in the assessee s industrial undertaking has not been doubted. It is not the case of the Assessing Officer that the assessee sold the grey cloth in raw form and did not use the same in manufacturing Poplin which is the finished product. Therefore, the Assessing Officer was not justified while alleging that the possibility of assessee s purchasing ready goods from the market / sister concern could not be denied. Furthermore, the Assessing Officer accepted the claim of the assessee in the preceding year and allowed deduction u/s 80IB of the Act. Therefore, keeping in view the principle of consistency, the deduction could not have been disallowed for the year under consideration as per ratio laid down by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlier year, therefore, the Assessing Officer was not justified in denying the claim of the assessee. In our opinion, the ld CIT(A) has passed a just and well reasoned order which requires no interference on our part. In that view of the matter, we do not see any merit in this appeal of the Department. 7. So, respectfully following the afore-referred to order of ITO, Ward, Balotra Vs. M/s P.T.M. Industries [supra], we do not see any merit in these appeals of the department. It is relevant to point out that in the said case of M/s P.T.M. Industries [supra] also, initially the A.O. allowed the claim of the assessee. Thereafter, the CIT-II, Jodhpur passed order u/s 263 of the Act and directed the A.O. to reframe the assessment, on the direction of the CIT-II, Jodhpur, the A.O. disallowed the claim of the assessee u/s 80IB of the Act as has been done in the present case. The reasoning given by the ld. CIT while setting aside the assessment u/s 263 of the Act and the A.O. while disallowing the claim of the assessee u/s 80IB of the Act in the reassessment framed, are similar in the present case as were in the case of P.T.M. Industries [supra]. In other words, the facts of both the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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