Income Tax Appellate Tribunal - Ahmedabad
Kadam Exports Pvt. Ltd., Ahmedabad vs Department Of Income Tax
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD BENCH "B" AHMEDABAD
Before Shri D.K. Tyagi, Hon'ble Judicial Member and
Shri A.K.Garodia, Hon'ble Accountant Member
ITA No.3023/ Ahd/2009
Assessment Year:2006-07
Date of hearing:26.7.11 Drafted:26.7.10
Income Tax Officer, V/s. Kadam Exports Pvt. Ltd.
W ard-2(2), Room F-101, Asavari Complex,
No.105, Navjivan Trust B/h Fun Republic
Building off. Ashram Cinema, Satellie Road,
Road, Ahmedabad Ahmedabad-380015
(Appellant) .. (Respondent)
Appellant by :- Shri Samir Tekriwa l, SR-DR
Respondent by:- Shri Tusher P Hem ani, AR
ORDER
PER D.K. Tyagi, Judicial Member:-
This is Revenue's appeal against the order of Commissioner of Income- tax(Appeals)-VIII, Ahmedabad dated 06-07-2009 for the assessment year 2006-07. The Revenue has taken the following ground:-
"1. The learned CIT(A) has erred in law and on facts in deleting the addition of Rs.1,21,07,688/- made on account of disallowance of deduction U/s 10B of the T. Act. 1961."
2. The brief facts of the case are that assessee is a private limited company engaged in business of manufacturing and trading of psyllium husks. The purchases seeds and after processing and cleaning the same manufactured, psyllium husks which is exported to European countries and USA. During the assessment proceedings the Assessing Officer observed that ITA No.3023/Ahd/2009 A.Y. 2006-07 ITO Wd-2(2), A'bd v. Kadam Exports Pvt. Ltd. Page 2 assessee was not eligible for deduction u/s.10B of the Income-tax Act, 1961 since the conditions as laid down u/s. 10B(2)(ii) and 10B(2)(iii) of the Act were not fulfilled. He accordingly issued a show-cause notice to the assessee to justify its claim for deduction u/s 10B of the Act. Assessing Officer also referred to the observation of the AO in the assessment order for the assessment order 2001-02 for purchase of plant and machinery from M/s Bhagirath Seeds Processing Pvt. Ltd. in assessment order 1995-96. In response to the show-cause notice assessee replied vide letter dated 20-11- 2008 enclosing therewith the explanation and reasons advanced for the assessment for the assessment order 2001-02. The assessee also attached copies of replied dated 19-12-2003 and 23-12-2003 filed during the assessment proceedings for the assessment order 2001-02. These replies have been reproduced by Assessing Officer in para-5.1 of his assessment order. The AO however, did not find the assessee's reply satisfactory and disallowed its claim of deduction u/s 10B of the Act holding that assessee- company was an industrial undertaking formed by reconstruction of business already in existence by transfer of plant and machinery previously used. Further, the old plant and machinery consisted more than 20% of the entire value of plant and machinery of the assessee, rendering it ineligible in terms of conditions u/s 10B(2)(ii) and 10B(2)(iii) of the Act.
3. Before Ld. CIT(Appeals) assessee placed reliance on the order of the Hon'ble ITAT in assessee's own case for the assessment order 2003-04 and the Ld. CIT(Appeals) allowed the appeal of the assessee by observing as under:-
"5.7 I have considered the facts of the case and the submissions of the Ld. A.R carefully. It is seen that the A.O while disallowing the appellant's claim for deduction u/s.10B has followed the assessment order for the A.Ys 2001-02 & 2003-04. It is further seen that in the similar facts and circumstances of the case the appellant's claim has been allowed for deduction u/s/10B by the Ld. CIT(A) have been confirmed by the Hon'ble ITAT, Ahmedabad in Appeal No. 1044/Ahd/2005 and ITA No.273/AHD/2007 for the A.Y. 2001-02 and 2003-04 respectively. Further, the A.O while disallowing the appellant's ITA No.3023/Ahd/2009 A.Y. 2006-07 ITO Wd-2(2), A'bd v. Kadam Exports Pvt. Ltd. Page 3 claim for deduction u/s.10B has not established with cogent material that the machineries brought by the appellant from M/s. Bhagirath Seeds Processors Pvt. Ltd were 2-0% or more of the entire value of Plant & Machinery of the appellant during the relevant period. Therefore, keeping in view the aforesaid facts and circumstances of the case and also the decision of Hon'ble ITAT, I do not find any justification for rejection of appellant's claim for deduction u/s.10B of the Act. In view of this, the appellant's ground is hereby allowed."
Since assessee has got relief by Ld. CIT(Appeals) following the decision of Hon'ble ITAT in assessee's own case for assessment order 2003-04, we feel no need to interference with the order passed by Ld. CIT(Appeals) and the same is hereby upheld. This issue of Revenue's appeal is dismissed.
4. In the result, Revenue's appeal is dismissed.
Order pronounced in Open Court on 29/07/2011
Sd/- Sd/-
(A.K.Garodia) (D.K. Tyagi)
(Accountant Member) (Judicial Member)
Ahmedabad,
Dated : 29/07/2011
*Dkp
Copy of the Order forwarded to:-
1. The Appellant.
2. The Respondent.
3. The CIT(Appeals)-VIII, Ahmedabad
4. The CIT concerns.
5. The DR, ITAT, Ahmedabad
6. Guard File.
BY ORDER,
/True copy/
Deputy/Asstt.Registrar
ITAT, Ahmedabad