2012 (7) TMI 188 - ITAT AMRITSAR

Deduction u/s 80IB - dis-allowance on ground that Unit-2 & Unit-3 were not separate and independent industrial undertakings and it was the case of extension of business of Unit-1 for which deduction u/s 80IB is not available being eleventh year of operation u/s 80IB - assessee engaged in the business of manufacturing of Pesticides and Agro Products at its three units which are based at Jammu - Held that:- Expansion of an industrial undertaking is not a bar for claim of deduction u/s 80IB. The same product or same location, common procurement, manufacturing and common employees cannot be the basis to hold that the assessee was not an industrial undertaking viable and separate undertaking. What is important is that there must be a set up of independent and separate viable undertaking. In this regard, the assessee has placed on record that it has made separate investment in the plant & machinery account and the building.

Provisions of Section 80IB do not provide in any way separate registration or maintenance of separate records for claiming deduction. The requirement u/s 80IB(1), 80IB(2) and 80IB(4) is that profit must derive from an industrial undertaking. Therefore, it cannot be held that undertakings are not eligible to claim deduction u/s 80IB.

Refund of excise duty - Revenue contended ineligibility for deduction u/s 80IB on ground that same being income 'not derived from the industrial undertaking' but the income attributable to the receipt of excise duty refund from the industrial undertaking - Held that:- Issue stands covered by the decision in the case of Shree Balaji Allows v. CIT [2011 (1) TMI 394 (HC)] wherein it has been held that the Excise Duty Refund is to be treated as 'capital receipt' and not liable to be taxed.

Depreciation - dis-allowance on ground that construction material used comes within preview of building and no P&M - Held that:- Once the said expenditure is part of the plant and machinery, which is not under dispute, such expenditure necessarily has to be part of plant and machinery and depreciation as claimed has to be allowed.

Dis-allowance u/s 43B - employees contribution to Provident Fund - payment before due date of filing return - omission [deletion] of the second proviso to Section 43-B - Held that:- In view of decision in case of CIT v. Alom Extrusions Ltd. [2009 (11) TMI 27 (SC)], the entire employees contributions to provident fund paid during the year, which is under dispute, has to be allowed.

Interest u/s 234B - assessee contended non-levy of interest as per Notification No.275/12/2007 dated 26.04.07 providing waiver of interest u/s 234B upto the AY 2007-08 in respect of the assessee residing in Kashmir and having their principal place of business in the Kashmir Valley - Held that:- Such interest u/s 234B in the present case cannot be levied.

Set off of a loss of 100% EOU, against the income arising from other units under the same head of profits and gains of business - Held that:- In view of decision in case of CIT v. Galaxy Surfactants Ltd. reported in [2012 (3) TMI 101 (HC)] it is evident that the assessee is entitled to set off of loss 100% EOU with the profits of other undertaking - Decided in favor of assessee.