Income Tax Appellate Tribunal - Ahmedabad
Tonira Pharma Ltd.,, Baroda vs Department Of Income Tax
IN THE INCOME TAX APPELLATE TRIBUNAL,D-BENCH,AHMEDABAD.
Before : Shri T.K.Sharma, Judicial Member, and
Shri N.S.Saini, Accountant Member.
ITA No. 1456/Ahd/2009
(Assessment Year 2006-07)
Income-tax Officer, Ward 4(4), Versus M/s.Tonira Pharma Ltd.,
Bareoda. PlotNo.23-24,GIDC Estate,
Nandesari, Dist. Vadodara.
PAN AABCT 0638F
(Appellant) (Respondent)
For the appellant: Shri M.C.Pandit, DR
For the respondent Shri S.V.Agrawal, AR
ORDER
Shri T.K.Sharma, Judicial Member : The Revenue has filed this appeal against the order dt.29.8.2008 of the Commissioner of Income-tax (Appeals) III, Baroda allowing the deduction of Rs.5,11,66,824 u/s.10B of the Income-tax Act, 1961.
2. At the outset the learned AR of the assessee submitted before us that the learned CIT(A) has allowed the deduction relying on the decision of the ITAT, Ahmedabad Bench in assessee's own case for the Assessment Year 2000-01 and 2001-02 vide consolidated order dt.11.1.2008 in ITA Nos. 3760 and 3761/Ahd/2004. He further pointed out that following the said decision, Tribunal has also dismissed the appeal of the Revenue for the Assessment Year 2003-04 in ITA No.3639/Ahd/2008 dt.16.1.2009. He produced a copy of both the Tribunal's order which are placed on record. In the order dt.11.1.2008 pertaining to the Assessment Year 2001-02, on the very same facts as in the present case, the Tribunal has dismissed the appeals of the Revenue and held that the CIT(A) is perfectly justified in allowing the claim of the assessee. The relevant portion of the said decision is reproduced as under :
"6. We have heard the rival contentions of both the parties. Looking to the facts and circumstances of the case, we find that the Development Commissioner, Kondala has given permission to manufacture bulk drugs. The Development Commissioner has also approved the manufacturing of drugs in the unit on plot No.4731 GIDC, Akleswar. We find that the exemption under section 10B is a special provision in respect of newly 2 established export oriented undertaking whereby exemption is admissible on fulfillment of certain conditions prescribed in section 10B(e) of the Income Tax Act, 1961. The assessee company is manufacturing drugs from three units but the assessee has claimed deduction u/s.10B only for the unit in plot No.4733. The assessee was granted registration as EOU by the Development, Kondala Free Trade Zone. The goods were manufactured and certificate was issued by Food & Drugs Control Department, Gandhinagar. The assessee has also given the classification of the sales which was done by the assessee in respect of the assessment years in the respective P & L account of existing units as well as new unit. The assessee has not obtained new GEB connection, however, permission increasing the load was obtained. The assessee had no new affluent treatment plant because the Company has enough capacity to discharge the affluent and treatment of wastages. The assessee has produced new products and details of the drugs manufactured by existing units as well as new units have been furnished. The assessee company has fulfill all the conditions stipulated in section 10B of the I.T.Act. We find that during the course of hearing, the learned AR of the assessee relied upon many decisions. It has been held by the Hon'ble Supreme Court in the case of CIT v. India Aluminium Co. Ltd. (108 ITR 367) has held that establishment of a new industrial unit as part of already existing industrial establishment may result in expansion of industry or the factory but if the new established unit itself an integrated and independent unit in which new plant and machinery is put up and is itself independent of the old unit, capable of production of goods, then it was classified as newly established industrial undertaking. In the case of CIT v. Hindustan Malleables & Forgings Ltd (191 ITR 70) , Hon'ble Patna High Court has laid down the tests for establishment of new units and it has been held that common source of power and common books of account is not relevant. The assessee has to establish that the investment of substantial fresh capital in the new industrial undertaking set up, employment of requisite labour therein, manufacture or production of articles in the said undertaking, earning profit clearly attributable to the said new undertaking and above all, a separate and distinct identity of the industrial unit set up. The fact that there was common management or the fact that separate accounts had not been maintained or that there was a common source of power would not mean that it was not a new undertaking. Moreover, Hon'ble Delhi High Court has also laid down similar tests. Therefore, considering the facts and circumstances of the case in the light of the above mentioned tests as laid down by different High Courts and also the Apex Court, we are of the view that the CIT(A) is perfectly justified in allowing the claim of the assessee. Thus, we do not find any merit in the grounds of appeal raised by the Revenue in this regard. Therefore, we uphold the impugned orders of the CIT(A) in this regard and dismiss both the appeals of the Revenue."
In ITA No.3639/Ahd/2008 in assessee's own case for the Assessment Year 2003-04, the Tribunal has followed the above decision. The learned DR, on the 3 other hand, did not dispute the above facts save and except relying on the order of the learned Assessing Officer. Considering the above and particularly the facts in the present case undisputedly are similar as in the AYs 2000-01 and 2001-02, 2003-04, we hold that the learned CIT(A) is perfectly justified in allowing deduction u/s.10B of the Income-tax Act,1961 as claimed by the assessee in the Assessment Year 2006-07, i.e., the Assessment Year under appeal, by following the decisions of the Tribunal in assessee's own cases referred to above. We, therefore, upheld the impugned order of the learned CIT(A) and dismiss the appeal of the Revenue.
3. In the result, the appeal of the Revenue is dismissed.
THIS ORDER IS PRONOUNCED IN OPEN COURT ON Dt.. 07.08.2009 Sd/- Sd/-
(N.S.Saini) (T.K.Sharma)
Accountant Member. Judicial Member
Date: 07.08.2009
(H.K.Padhee)
Senior Private Secretary.
Copy of the order forwarded to :
1. The Assessee
2. The Assessing Officer
3. The CIT concerned.
4. The CIT(A) concerned.
5. The DR, Ahmedabad
6. Guard File (in duplicate)
True Copy, By order,
Deputy.Registrar.