Income Tax Appellate Tribunal - Ahmedabad
Seal For Life India Pvt. Ltd., (Formerly ... vs The Income Tax Officer, Ward-1(1)(3),, ... on 2 August, 2018
ITA No. 380/Ahd/2017
Seal For Life India Pvt Ltd Vs. ITO
Assessment year: 2008-09
Page 1 of 3
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "D" BENCH, AHMEDABAD
[Coram: Pramod Kumar, AM and Ms. Madhumita Roy, JM]
ITA No. 380/Ahd/2017
Assessment Year: 2008-09
Seal For Life India Pvt Ltd ..............................Appellant
(Formerly known as Berry Plastics Pvt Ltd)
Plot No.17, GIDC Estate,
Manjusar, Savli, Vadodara
[PAN : AACCT 3009 K]
Vs.
Income Tax Officer ...........................Respondent
Ward 1(1)(3), Vadodara
Appearances by:
Saumya Sheth & Bhaumik Goda, for the Appellant
VK Singh, for the Respondent
Date of concluding the hearing : 08.05.2018
Date of pronouncing the order : 02.08.2018
O R D E R
Per Pramod Kumar, AM:
1. By way of this appeal, the assessee appellant has challenged correctness of learned CIT(A)'s order dated 30th November 2016, in the matter of assessment under section 143(3) r.w.s. 263 of the Income-tax Act, 1961, for the assessment year 2008-09.
2. In the first ground of appeal, the assessee has raised the following grievance:-
1. Ground No. 1: Disallowance of deduction under Section 10B of the Act:
1.1 On the facts and circumstances of the case and in law, the learned CIT(A) has erred in confirming the action of the learned AO in disallowing deduction under section 10B of the Act amounting to Rs. 49,01,211 for the reason that the EOU is not approved by the Board as per provisions of section 10B of the Act.
1.2 On the facts and circumstances of the case and in law, the learned CIT(A) has erred in confirming the action of the learned AO in not considering that appellant shall be eligible for deduction under 10B of the Income tax Act, 1961 till the date of surrender of certificate i.e. 12 March 2008.ITA No. 380/Ahd/2017
Seal For Life India Pvt Ltd Vs. ITO Assessment year: 2008-09 Page 2 of 3
3. The assessee before us is a company engaged in manufacturing of coating material for girth weld joints of pipelines carrying oil, gas and water, and is also engaged in allied business activities. During the course of original assessment proceedings, the assessee had claimed, and was duly granted, claim for deduction under section 10B. However, the assessment so framed was subjected to revision proceedings under section 263, inter alia, for verifying whether the unit was duly approved as 100% EOU by the appropriate authority of the Central Government. In the remanded proceedings, the Assessing Officer declined the 10B benefit on the ground that the approval granted to the unit was by the Development Commissioner Kandla SEZ and not by the Board of Approvals (BoA) which is the appropriate authority. It was also noted that, in any event, the assessee had made an exit from 12th March 2008. Aggrieved, assessee carried the matter in appeal before the CIT(A) but without any success. The assessee is not satisfied and is in further appeal before us.
4. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position.
5. We find that Hon'ble jurisdictional High Court, in the case of PCIT vs. ECI Technologies Pvt Ltd [(2015) 61 taxmann.com 30 (Guj.)] wherein Their Lordships have specifically accepted that....."when it is found that, at the relevant time, the Development Commissioner granted the approval of 100% EOU in favour of the assessee-company, which came to be subsequently rectified by the Board of Approval.... as such the ratification will be from the date on which Development Commissioner granted the approval". Once Hon'ble jurisdictional High Court approves this approach, the reasoning prevailing upon the authorities below cannot be approved by us. We, therefore, uphold the plea of the assessee. The assessee indeed deserves the deduction under section 10B. However, as the assessee has made an exit w.e.f. 12th March 2008, the assessee will be eligible for deduction only in respect of profits upto 12th March 2008 in the relevant previous year.
6. Ground no.1 is thus partly allowed in the terms indicated above.
7. In ground no.2, grievance of the assessee is as follows:-
2. Ground No. 2: Disallowance of interest paid on ECB loan of Rs.16,70,309 under Section 40(a)(i) of the Act:
2.1 On the facts and circumstances of the case and in law, the learned CIT(A) has erred in confirming the action of the learned AO in disallowing interest on ECB loan amounting to Rs.16,70,309/- paid by the Appellant under section 40(a)(i) of the Act."
8. The short reason for which the Assessing Officer made the impugned disallowance was that the assessee "could not produce copy of TDS return or challans to substantiate that it has actually deducted tax on payment made" to the party. The challan counterfoil filed by the assessee was brushed aside. Aggrieved, he carried the matter in appeal but without success. The assessee is not satisfied and is in further appeal before us.
ITA No. 380/Ahd/2017Seal For Life India Pvt Ltd Vs. ITO Assessment year: 2008-09 Page 3 of 3
9. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position.
10. We find that the assessee has produced certificates issued by chartered accountant specifying the rate at which tax deduction was required to be made from the remittances in question (at page nos. 86 - 89 of the paper-book) and copies of TDS challans evidencing such payments (at pages 84-85 of the paper-book). We find that, as learned counsel rightly points out, the judgment of Hon'ble Punjab & Haryana High Court, in the case of Haryana State Road & Bridges Development Corp. Ltd. Vs. CIT [(2016) 388 ITR 253 (P&H)] settles the issue in favour of the assessee in principle inasmuch as the TDS challans are genuine and the tax was rightly deducted, disallowance cannot be made. The plea of the learned counsel is indeed well taken. We, therefore, accept the claim of the assessee in principle and remit the matter to the file of the Assessing Officer for limited verification as above.
11. Ground no.2 is thus allowed for statistical purposes in the terms indicated above.
12. In the result, appeal is partly allowed. Pronounced in the open court today on nd the 2 August, 2018 Sd/- Sd/-
Ms. Madhumita Roy Pramod Kumar
(Judicial Member) (Accountant Member)
Ahmedabad, the 2nd day of August, 2018
**bt
Copies to: (1) The appellant
(2) The respondent
(3) Commissioner
(4) CIT(A)
(5) Departmental Representative
(6) Guard File
By order
TRUE COPY
Assistant Registrar
Income Tax Appellate Tribunal
Ahmedabad benches, Ahmedabad
1. Date of dictation: ......02.08.2018...............
2. Date on which the typed draft is placed before the Dictating Member: ... 02.08.2018....
3. Date on which the approved draft comes to the Sr. P.S./P.S.: ...02.08.2018.....
4. Date on which the fair order is placed before the Dictating Member for Pronouncement: . 02.08.2018.
5. Date on which the file goes to the Bench Clerk : . 02.08.2018. .......
6. Date on which the file goes to the Head Clerk : ..................................
7. The date on which the file goes to the Assistant Registrar for signature on the order: ....
8. Date of Despatch of the Order: ........................