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KHS Machinery Pvt. Ltd. v. ITO Wd-4(2) A'bd Page 5

7. We have heard the rival contentions and perused the facts of the case. Both the parties before us have relied upon the decision in assessee's own case for A.Y. 2003-04 (supra) on the present issue. Therefore for the sake of clarity we reproduce the relevant paras of the said ITAT order for A.Y. 2003- 04 (supra) as under:-

"9.3 In the light of aforesaid provisions, we have to determine the status of taxpayer's industrial undertaking. In the case of under consideration, the book of industrial undertaking is that of manufacturing bottling plants. Therefore, it has to be seen, which are the plant and machinery and the ld. CIT(A) are of the opinion that the value of such plant and machinery exceeds Rs. One croes. The AO has included value of the entire plant and machinery, including vehicles, computer and computer software as also moulds, dies, jigs, consumables etc., while the ld. CIT(A) has recorded his findings only on inclusion of vehicles, computer and computer software. However, the arguments of both the sides with reference to these items items of plant and machinery are considered as under:-

(e) Computer software 9.32 As regards computer hardware and software, the ld. AR on behalf of the taxpayer argued that computers are installed in office and therefore have to be excluded in terms of decision of the ITAT in the case of Samir Diamond Mfg. (P) Ld. 67 ITD 25 (Ahd). There is no finding in the order of either AO or ld. CIT(A) as to whether or not all the computers are installed in office ld. CIT(A) observed that since computers have not been excluded in the note 2(b) of aforesaid notification dated 10.12.1999, accordingly these have to be considered for determining the value of plant and machinery. Hon'ble jurisdictional High Court in the case of CIT Vs. Prabhudas Kishoresad Tobacco Products P Ld. 282 ITR 568 (Guj) held that for determining the value on plant and machinery for ascertaining the status of industrial undertaking SSI, the actual cost of plant and machinery which is installed in the industrial undertaking, and used for the purpose of business of the undertaking, has to be adopted. The provision does not stipulate taking the aggregate value of plant and machinery of the business as a whole, but limits the same to the plant and machinery relatable to the industrial undertaking. Since there is no finding either in the order of the AO or the ld. CIT(A) as whether or not all the computers, including software, valuing Rs.98.14 lacs are installed in the office or are used in the process of manufacturing bottling plants, in the light of aforesaid decision of Hon'ble jurisdictional High Court and in the interest of justice, we vacate the findings of the ld. CIT(A) on this aspect and restore the matter to the file of the AO with the directions to ascertain as to whether or not all the computers are installed in office or as to whether some of these are installed for the purpose of manufacturing bottling plants in the industrial undertaking and thereafter, determine the status of industrial undertaking as an SSI and consequently entitlement to deduction u/s.80IB of the Act, in accordance with law after allowing sufficient opportunity to the taxpayer.