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TMI Blog2015 (5) TMI 512X X X X Extracts X X X X X X X X Extracts X X X X ..... cutive years from the initial assessment year. In the present case the appellant was first recognized as a permanent SSI Unit in the year 1992 and at the time of recognition the investment limit was ₹ 60 lakhs. Thereafter, it was increased to ₹ 3 crores in the year 1997 and later in the year 1999 it was reduced back to ₹ 1 crore and clarifications were given by the Ministry concerned that where the units have taken steps for implementation of their project and investment exceeded ₹ 1 crore in the years 1997 and 1998, they should continue to be regarded as SSI Units. It is only after formation of a new agency by name Micro, Small and Medium Enterprises, under the Ministry of Industries, in the year 2006 the investment limit was fixed at ₹ 5 crores. As over the years, they are running their unit adhering to the norms fixed by the Government from time to time and, in any case, when all the conditions stipulated for SSI Units are being followed by them and recognized as SSI Unit by the prescribed authority, they cannot be disallowed the deduction under section 80IB of the Act - decided in favour of assessee. - ITA.No.62/Hyd/2012, ITA.No.1080 & 273/Hyd/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... velopment (R : D) equipment and pollution control equipment. iv. The cost of generation sets, extra transformer, etc., installed by the undertaking as per the regulations of the State Electricity Board. v. The bank charge and service charge paid to the National Small Industries Corporation or the State Small Industries Corporation. vi. The cost involved in procurement or installation of cables, wiring, bus bars, electrical control panels (not those mounted on individual machines), oil circuit breakers/ miniature circuit breakers etc., which are necessarily to be used for providing electrical power to the plant and machinery/ safety measures. vii. The cost of gas producer plant. viii. Transportation charges (excluding of taxes e.g. Sales Tax, Excise etc.) for indigenous machinery from the place of manufacturing to the site of the factory. ix. Charges paid for technical know-how for erection of plant and machinery. x. Cost of cush storage tanks which store rawmaterials finished products only and are not linked with the manufacturing process; and xi. Cost of fire fighting equipment. In the case of imported machinery, the following shall be included in calculat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of the assessee for deduction under section 80IB for A.Y. 2009- 2010 was also disallowed by the A.O. on the same grounds as adopted in A.Y. 2008-2009 after re-computing the value of plant and machinery of the assessee at ₹ 8,20,19,357. In the return of income filed for A.Y. 2007-2008, the claim made by the assessee for deduction under section 80IB amounting to ₹ 64,17,798 was originally allowed by the A.O. under section 143(1) of the Act. On the basis of the assessments completed under section 143(3) for A.Ys. 2008-2009 and 2009-2010, the assessment for A.Y. 2007-2008 was reopened by the A.O. and in the assessment completed under section 143(3) read with section 147 of the Act vide order dated 31.10.2012, the claim of the assessee for deduction under section 80IB for A.Y. 2007- 2008 was also disallowed by the A.O. on the same grounds as given in A.Ys. 2008-2009 and 2009-2010 after re-computing the value of plant and machinery of the assessee company at ₹ 5,15,67,330. 4. Against the orders passed by the A.O. for all the three years under consideration i.e., A.Ys. 2007-2008, 2008- 2009 and 2009-2010, appeals were preferred by the assessee before the Ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Rules extant under the IDR Act or the Income Tax Act, 1961. The Assessing Officer had not taken note of the submission of the appellant that for the limited purpose of showing that the investment made by it is below ₹ 5 crores as per IDR Act, the appellant had classified the assets into two categories, one as core machinery and the balance assets as other assets, keeping the very exceptions provided in the IDR Act. For the purpose of calculating depreciation the total plant and machinery, any way, was clubbed and shown under the single block of assets as per Income Tax Act, 1961 by the appellant. 6.2. Apart from the above, the submissions of the appellant made on legal front also convinced me that the appellant is entitled for deduction under section 8018 of the Act. As per clause (g) to subsection (14) of section 80IB, small-scale industrial undertaking' means an industrial undertaking which is, as on the last day of the previous year, regarded as a small-scale industrial undertaking under section 11B of the Industries (Development and Regulation) Act, 1951. The appellant was permanently registered with DIC, Ranga Reddy as SSI Unit and this registration cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as fixed at ₹ 5 crores. 6.5. It is the submission of the appellant that over the years, they are running their unit adhering to the norms fixed by the Government from time to time and, in any case, when all the conditions stipulated for SSI Units are being followed by them and recognized as SSI Unit by the prescribed authority, they cannot be disallowed the deduction under section 80IB of the Act. 6.6. Considering all the foregoing facts and circumstances, I am inclined to accept the submissions of the assessee, both factually and legally, and direct the Assessing Officer to allow the deduction claim made by the assessee under section 80IB of the Act amounting to ₹ 3,01,11,757/-. 5. The disallowance made by the A.O. under section 80IB thus was confirmed by the Ld. CIT(A) in A.Y. 2008-2009 while the same was deleted by the Ld. CIT(A) in A.Ys. 2009- 2010 and 2007-2008. Aggrieved by the order of the Ld. CIT(A) for A.Y. 2008-2009, assessee is in appeal before the Tribunal while the Revenue has challenged the relief allowed by the Ld. CIT(A) to the assessee in A.Ys. 2009-2010 and 2007-2008 in the present appeals filed before the Tribunal. 6. We have heard the arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, it is subject to two conditions as stipulated therein. The second condition is what is applicable to the case on hand which provides, if the industrial undertaking is a small scale industry undertaking, it has to begin manufacture or produce articles or things at any time during the period beginning on the 1st day of April 1995 and end on the 31st day of March 2002. This is a condition which a small scale industry has to fulfil in addition to the conditions mentioned in Sub-sec. (2) of Sec.80IB. Once all these conditions are fulfilled, a small scale industry is entitled to the benefit of deduction for a period of 10 consecutive years beginning with the initial assessment year. 5. In the entire provision, there is no indication that these conditions had to be fulfilled by the assessee all the 10 years. When once the benefit of 10 years, commencing from the initial year, is granted, if the undertaking satisfy all these conditions initially, the undertaking is entitled to the benefit of 10 consecutive years. The argument that, in the course of 10 years, if the growth of the industry is fast and it acquires machinery and the total value of the machinery exceeds ₹ 1 c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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