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TMI Blog2014 (3) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... l before the Tribunal was directed against the order passed by the Commissioner of Income Tax (Appeals)-VI (for short 'the CIT(A)') dated 08-11-2006. By this order, the CIT (A) confirmed the assessment order dated 14-03-2006 passed by the Assessing Authority. 2. The substantial questions of law raised by the Revenue in this appeal read thus: 1. Whether the Tribunal was correct in holding that the assessee's claim for deduction under Section 80IB of the Act is not hit by the exception provided in Section 80IB(2)(iii) read with Schedule 11th (Item 25) to the Income-Tax Act, as polyutherim foam used by the assessee in the manufacture of automobile seat results in commercially different product then that mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section. 80-IB of the Act claiming to be a Small Scale Industrial Undertaking. 4. The respondent-assessee filed its return of income on 29-10-2003 declaring the total income of Rs.2,73,90,293/-. The same was processed and taken up for scrutiny by issuing notice under Section 143(2) of the Act. In the course of assessment, it was noticed that the assessee had claimed deduction under Section 80-IB to the extent of Rs.28,98,051/- i.e., 30% benefit available on Pune Unit as it was granted in the earlier year. In the course of assessment, the Managing Director of the assessee was examined and on the basis of the materials placed by the assessee on record, the Assessing Officer held that during the relevant assessment year the assessee man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 80-IB(2)(iii) is relevant for our purpose. This Section applies to any industrial undertaking which fulfills, insofar as the present appeal is concerned, the condition that it manufactures or produces any article or thing, not being any article or thing specified in the list in the Eleventh Schedule, in any part of India Provided that the condition in this clause, in relation to a small scale industrial undertaking or an industrial undertaking referred to in sub-section (4), shall apply as if the words "not being any article or thing specified in the list in the Eleventh Schedule" had been omitted. The remaining part of this provision is not relevant for our purpose. In the Eleventh Schedule, we are concerned with Entry 25 which reads a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80-IB is the end product and not raw materials. He submitted that the PT foam is used by the assessee as a raw material for manufacturing seats, and therefore, it cannot be stated that it is covered by Entry 25 in the Eleventh Schedule. In support of his contention he placed reliance upon the following judgments: (i) COMMISSIONER OF INCOME-TAX v/s M/s. VINBROS AND COMPANY (2012) 349 ITR 697 (SC); (ii) COMMISSIONER OF INCOME-TAX v/s MALBOROUGH POLYCHEM P.LTD (2009) 309 ITR 43 (Raj); (iii) COMMISSIONER OF INCOME-TAX v/s PRABHUDAS KISHORDAS TOBACCO PRODUCTS P. LTD. (2006) 282 ITR 568 (Guj). 8. In the present case, it is not in dispute that the assessee manufactures the PT foam in different shapes of automobile seats. Over and above, manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or pointed out to us that apart from manufacturing the PT foam in different shapes of automobile seats, they carry on any further process so as to change its original character as "polyurethane foam". What is required for seeking deduction under Section 80-IB is that one should not manufacture or produce any article or thing, not being any article or thing specified in the list in the Eleventh Schedule. Having regard to the admitted position that the assessee manufactures the PT foam, it cannot be stated that it is not a part of the Eleventh Schedule. The Tribunal for no valid reason has recorded a finding that the assessee is not engaged in the manufacture or production of the PT foam. We fail to understand as to why, in the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the judgment of Rajasthan High Court in MALBOROUGH POLYCHEM P. LTD. in support of his contention that on two earlier occasions, i.e. for the assessment years 1999-2000 and 2001-2002, the benefit under Section 80-IB was given to the assessee and therefore the principle of consistency ought to be followed for the subsequent assessment years. With respect, we do not agree with this view. In our opinion, if the Assessing Authority has committed any error of law in allowing the deduction on two earlier occasions, it is not necessary that they should extend similar benefit in the subsequent years and allow the illegality to perpetuate. In our view, these judgments are of no avail to the respondent-assessee. 12. In the circumstances, we answer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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