|
Advanced Search Options
Income Tax - Case Laws
Showing 441 to 460 of 695 Records
-
2012 (11) TMI 467
Deduction u/s. 80IB(10) - denial of claim for for want of completion certificate - Held that:- There is no dispute that the assessee has been following percentage completion method and also the assessee furnished the evidence in the form of property assessment document, water connection documents, pollution control permission etc. On an examination of the notices issued by the Bangalore Mahanagar Palike (Municipal Corporation) in respect of 141 flat owners in the assessee's housing project, it is seen that in the notices dated 17.1.2007 in response to the flat owners applications dated 1.12.2006 requesting for assessment and allotment of municipal numbers, the Municipal Corporation had issued notices for payment of the required taxes for the initial assessment. The proof of payment of taxes in certain cases has also been produced. Thus it would appear that the applicants, being flat owners, had individually filed application before the Municipal Corporation for allotment of municipal numbers and assessment. The notice, as above, clearly indicates that the municipal numbers were being allotted in respect of newly constructed residential apartments.
The assessee is following Percentage Completion Method. This method is recognised by the Income-tax Act for disclosing the profit in the case of a builder. The purpose of granting deduction u/s. 80IB(10) is to promote housing projects. If we accept the proposition of the Department that the deduction u/s. 80IB(10) has to be granted only a tax payer who follows only "Project Completion Method" it leads to an absurd situation as the developer who is following Percentage Completion Method is not entitled for deduction u/s. 80IB(10) though all other requirements of the section being fulfilled - If the Revenue is taxing the profit in the year under consideration on the ground that the assessee is adopting "Percentage Completion Method" then the natural corollary should be that the connected deduction ought to be granted simultaneously in this year or the other method of computation is that the Revenue must not tax the profit of the project yearly on the basis of "Percentage Completion Method" but tax the entire profit on completion of the project by applying "Project Completion Method" - direct the AO to allow deduction u/s. 80IB(10) - in favour of assessee.
-
2012 (11) TMI 466
Deduction u/s. 80IB(10) - denial of claim as the assessee is not a developer and only carried on the work of contractor and build the residential complex - Held that:- the assessee has been engaged as a builder and not as a contractor. In the present case, the assessee having right to 60% in the constructed area and also a share in the undivided property, cannot be called a mere contractor. Thus the claim of deduction u/s. 80IB(10) is to be granted to the assessee to the extent of its share and there cannot be double deduction - in favour of assessee.
Non production of completion certificate - Held that:- Intention would only have been that for the project as a whole, there should be certification from the relevant authority proving the commencement and completion, and not that a completion certificate should be there in every year of the project span. Thus, the Assessing Officer need not insist on the completion certificate in this assessment year, this is the right meaning of the statute - in favour of assessee.
Calculation of built up area - AO included the proportionate share of common area in the size of each flat - Held that:- The Finance Act (No. 2) of 2004 inserted the definition of "built up area" to clarify this position, thus finding merit in the contention of the assessee that the proportionate common area should be excluded from the calculation or flat size - in favour of assessee.
NIL deduction v/s full deduction v/s proportionate deduction u/s 80IB - Held that:- The assessee is eligible for deduction u/s. 80IB in respect of those flats whose size is within the prescribed limits - in favour of assessee.
Work-in-progress related to Maredpally Project credited to the Profit and Loss A/c - Held that:- he Assessing Officer may be directed not to reduce the eligible deduction u/s. 80IB by taking into account the work-in-progress relating to Maredpally site since the quantification of the work-in-progress has not affected the deduction claimed by the assessee u/s. 80IB(10). As the CIT(A) not adjudicated this ground, this issue is remitted back to the file of the CIT(A) for fresh adjudication - in favour of assessee for statistical purposes.
Chit dividend, scrap sales and discount on materials are to be considered as income from business eligible for deduction u/s. 80IB(10) as decided in CIT v. Kovur Textiles & Co. [1980 (1) TMI 8 - ANDHRA PRADESH HIGH COURT ]. However, the other income i.e., rent on vacant flat, interest on deposit cannot be considered as income from business and the same has to be considered as income from house property/income from other sources, respectively - partly in favour of assessee.
-
2012 (11) TMI 465
Income from the share transactions - Capital gain v/s business income - Held that:- The assessee has made several transactions of purchase of shares during the relevant year under consideration, and if there high volume, frequency and regularity of the activity carried on by the assessee in a systematic manner, it would partake the character of business activities carried on by the assessee in shares, and it cannot be said that the assessee has merely made investments in shares.
Matter remanded back to AO to redetermine the income relating to each category of shares as business income or income from capital gains as the case may be, in conformity with Circular No.4 of 2007 dated 15.6.2007.
-
2012 (11) TMI 464
Unexplained investment in the factory building - case referred to DVO - Held that:- A.O. did not reject the books of account regularly maintained by the assessee by invoking section 145(3). The assessee raised the ground before the CIT(A) that reference under section 142A to the D.V.O. is without jurisdiction as the A.O. did not reject the books of account. The CIT (A) rejected the assessee's contention with general observation without pointing out serious infirmity in the books of account maintained by the assessee. The CIT (A) on general presumption stated that the cost of construction recorded in the books of account is not supported by bills and vouchers without pointing out any specific instances. The CIT(A) has failed to point out any material in support of his finding that the books of account maintained by the assessee is liable to be rejected under auction 145(3).
No convincing reasons why the CIT(A) has estimated cost of construction only on the basis of D.V.O.'s. report when the A.O. made reference to D.V.O. without rejecting books of account regularly maintained by the assessee - order of the CIT(A) is set aside by deleting the addition sustained by the CIT(A) - in favour of assessee.
-
2012 (11) TMI 463
Imposition of Penalty u/s 271D,271E – For violation of provisions of sec 269SS, Sec 269T – Shri Suryakant R. Shah (S.R. Shah) was the spouse of a partner of the assessee firm and trustee of B.G. Education Trust which was running a school in the name of Ambe Vidyalaya. The collection centre for the fees of the hostel and the school was at a single place. Sometimes, the fees collected by the hostel were handed over to Shri S.R. Shah as the working hours of the bank might have been over. Since Shri S.R. Shah held the cash on behalf of the hostel for its safe custody, according to the assessee, the same did not imply that the hostel had given any loan to Shri S.R. Shah. Similarly, if some amount was received from Shri S.R. Shah, the same did not mean that hostel had accepted any loan from Shri S.R. Shah in cash. It was the case of the assessee that if some expenditure was incurred by the hostel or the school students and the amount was reimbursed to the hostel by the Managing Trustee of the school, that is, Shri S.R. Shah the same did not become a deposit or loan given or taken by way of cash.
Held that:- There was reasonable cause for the assessee to indulge into cash transactions in violation of Section 269SS of the Act. Shri S.R Shah acted as a custodian only, holding the money for a brief period, and that the same were deposited in the hostel's bank account at the earliest opportunity.
The provisions of sections 269SS and 269T of the Act would not be applicable. Consequently, the question of contravention of such provisions attracting penalty under sections 271D and 271E of the Act would also not arise. - Decided in favour of appellant.
-
2012 (11) TMI 462
Adjustment to ALP - CUP v/s TNMM method - assessee trader of coffee - Held that:- As considered in AY 2006-07 TPO as well as the DRP have not considered the objections raised by the assessee against the comparables selected by the TPO for arriving at the ALP. As seen from the submissions of the assessee, the glaring differences that appears that comparable used by TPO is in the business of processing and trading in spices, whereas the assessee is in the business of trading in Coffee.
As the facts of present year are same as above it would be appropriate to consider as to which the most appropriate method for determining the ALP to the TPO for fresh consideration. The fact the assessee adopted CUP method as the most appropriate method will not be conclusive and the endeavour of the assessee and the revenue should be to arrive at the correct ALP. Assessee also submitted that the price at which the Coffee Board sells Coffee seeds should not be taken as bench mark - remand the matter to the TPO for fresh consideration.
-
2012 (11) TMI 461
Validity of order passed u/s 263 by CIT(A) - sale of theatrical rights - DR submitted that CIT(A) had not considered the applicability of Rule 9A - Held that:- It is evident from the order of the CIT(A) that the claim of cost of production of film was a subject matter of appeal before the CIT(A) and CIT(A) after consideration of remand report of the AO gave his finding. Therefore, this order of the AO, undisputedly had merged with the order of the CIT(A) as far as the claim of cost of production of film is concerned.
AO specifically stated in the remand report to make "working of deduction allowable u/r 9A" of I.T. Rules. Further, also observed from para-10 of the assessment order that the AO called for the details from the assessee by issuing notice u/s 142(1) dated 18-12-2009 to furnish details of cost of production allowable as per Rule 9A of Rs. 27.19 crores. As mentioned hereinabove, the AO after considering the reply filed by the assessee vide letter dated 29-12-2009 as mentioned by the AO considered the claim of the assessee to the extent of Rs. 24,84,37,124/- and disallowed the balance amount of Rs. 2,34,91,380/-. Therefore, it is not factually correct that the AO at the time of making the assessment did not consider the applicability of Rule 9A vis-a-vis claim of the assessee on cost of production of film.
CIT in his revisional proceedings cannot travel beyond reasons given by him for revision in show cause notice issued u/s 263. CIT has not exercised his revisional jurisdiction u/s 263 in respect of allowability of claim of production of film in the context of Rule 9A of I.T. Rules validly as the assessment order on this issue had already been merged with the order of CIT(A) dated 12-10-2011 much before issue of show cause notice dated 19-3-2012 to assume jurisdiction u/s 263 therefore, that the order of ld. CIT dated 29-3-2012 is liable to be vacated - in favour of assessee.
-
2012 (11) TMI 460
Cancellation of Registration granted u/s 12A - Held that:- The fact that the Assessee was paying commission to persons who solicit students for studying in the Assessee's institution cannot lead to the conclusion that the Assessee is not imparting education. Similarly purchase of a BMW car, borrowing of loans from Sindhi Financiers, non-maintenance of regular books of accounts, violations of provisions of Sec.13(1)( c) of the Act in as much as the trustees were paid enormous salary are all by way of passing reference having no relevance to whether or not the Assessee was pursuing education as its main object. There are no facts brought out in the impugned order regarding the genuineness of the activities of the trust or as to whether the object of education was not pursued by the Assessee as its main and predominant activity. In fact, the order of the DIT(E) does not anywhere show that the assessee is not imparting education.
The definition of Charitable Purpose as given u/s 2(15) of the Act refers to "relief to poor, medical relief, education and the advancement of any other object of general public utility". - eleemosynary element is not essential element of charity. It is also not a necessary element in a charitable purpose that it should provide something for nothing or for less than it costs or for less than the ordinary price.
The surplus generated, if it is held for charitable purpose and applied for charitable purpose of the assessee, and then the Assessee has to be considered as existing for a charitable purpose. There are enough safeguards provided in Sec.12 and 13 of the Act to ensure that personal benefits of the persons in control of the trusts are not treated as having applied for charitable purpose and for being brought to tax like provisions of Sec.13(1)(c) of the Act which restricts unreasonable and excessive payments to certain category of persons connected with a trust or other institution - In such circumstances, order u/s 12AA(3) of the Act, cannot be sustained - In the result,appeal of the assessee is allowed.
-
2012 (11) TMI 459
Penalty for failure to submit returns or statements in time - reasonable cause - No notice issued for default under section 272A (2) (k) - Held that:- There is mistake in notice as regards mentioning of clause (2) of section 272A of the Act is covered by section 292BB which provides that where an assessee has appeared in any proceeding or co-operated in any enquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such case shall be precluded from taking any objection in any proceeding or enquiry under this Act that the notice was not served upon him or not served upon him in time or served upon him in an improper manner - confirm the order of the CIT(A) upholding validity of impugned proceedings on the strength of notice issued under section 272A(2)(c) - against assessee.
No provision in the Act for issuing separate notice for levy of penalty under section 272A(2) for late or non-filing of form 24Q and 26Q - against assessee.
Penalty - reasonable cause - As decided in Royal Metal Printers (P) Ltd. Versus ACIT [2010 (1) TMI 938 - ITAT, MUMBAI] the delay in filing the returns, even if they are characterized as negligence on the part of the assessee, can only be considered as a technical or venial breach of law for which penalty should not be levied automatically. In the present case the requirement of filing form 24Q was new one for the assessee and as being the first year of filing such return, thus there is no dispute about the fact that the tax has been deducted by the assessee, there was reasonable cause for delay in filing of returns - penalty cancelled - in favour of assessee.
-
2012 (11) TMI 458
Disallowance of expenses in relation to the exempt income u/s. 14A - held that:- The High Court observed that the assessee had not retained the shares with the intention of earning dividend income which was incidental due to his sale of shares which remained unsold by the assessee. The High Court, therefore, did not uphold the order of the Tribunal disallowing the expenditure in relation to the dividend from shares. Thus there being a direct judgment of a Hon’ble High Court on this issue, the same has to be followed in preference to the decision of the Special Bench of the Tribunal in the case of M/s. Daga Capital Management P. Ltd. (2008 (10) TMI 383 - ITAT MUMBAI).
-
2012 (11) TMI 457
Reassessment proceedings - question of jurisdiction raised by assessee - Held that:- The petitioner had changed his registered office w.e.f. 4th November, 1989 from first floor 6376 Naya Bans Delhi to Y-192, Loha Mandi, Naraina, New Delhi, and thereafter w.ef. 3rd October, 2000 from Y-92 Loha Mandi, Naraina, Delhi to Room No.9, Y-3C, Loha Mandi, Naraina, Delhi. The principal place of business is at Agra, where he has a floor mill. In his affidavit filed in the High Court, Shri Ashok Kumar Agrawal has described himself to be working as Director of the petitioner company and has given his address as 6/26, Bhai Gali, Belanganj, Agra. He has not annexed the acknowledgment of return or assessment order of the year 1999-2000, with which we are concerned in the present case.
It was in the search and seizure operations carried out in Ganga Ram Agrawal Group of cases, a report was sent by Addl. CIT (Inv), Agra on 10.12.2003 reporting the debts of the assessee in the books of accounts of the Agrawal Groups of persons in respect of assessee from which it was derived and on which reasons were recorded by Addl. Commissioner of Income Tax, Range-4, Agra in the notice under Section 148 that the income of Rs. 1,32,45,426/- of the assessee for the year 1999-2000 has escaped assessment. The limitation will expire on 31.12.2006. The respondent no.1 took extreme caution and care before assuming jurisdiction, which was concurrently vested in her. The petitioner admittedly has a branch office and principal place of business at Agra. The respondent no.1, as A.O., send the matter firstly to DCIT, Circle-5 (1), New Delhi and thereafter DCIT, Circle-3 (1), New Delhi which was very surprising as to why these officers at Delhi did not take over the jurisdiction. They simply returned the papers back to respondent no.1, firstly by advising her to pass order in view of G.K.N. Driveshafts (India) Ltd.'s case (2002 (11) TMI 7 - SUPREME COURT) and thereafter returning the papers on the ground that the assessment order of the year 1999-2000, was not accompanied with the letter. It appears that the Assessing Officer at Delhi were either trying to avoid or had some reasons not to assume jurisdiction over the matter.
The respondent no.1, before proceedings with the matter, requested for permission of the Commissioner of Income Tax-II, Agra to proceed with the matter who was directed to frame protective assessment orders, so that there is no loss of revenue. The order dated 1.12.2006 giving such direction to her was sufficient to allow her to assume jurisdiction for making assessment. Thus no error of jurisdiction committed by the respondent no.1 in proceedings with the assessment of the income under Section 147/148 which had escaped from the assessment of the petitioner-assessee in the assessment year 1999-2000 - against assessee.
-
2012 (11) TMI 456
Non deduction of TDS - payment made to Mathadi Board - disallowance u/s 40(a)(ia) - Held that:- there is no contractual relationship as a principal and contractor between these assessees and Mathadi Board, but, in fact, in pursuance of the provisions of the Act as well as the scheme, both these assessees are bound to engage the labourers or the workers through the Mathadi Board therefore, the disallowance made by the A.O. invoking the provisions of section 40(a)(ia) was not justified - in favour of assessee.
Disallowance for non-deduction of tax u/s 194A - Held that:- There is no dispute about the fact that the assessee has obtained the Form No. 15G has provided under section 197A(1)(ia) but the assessee did not furnish the said Form to the CIT, Kolhapur. Thus it is only the procedural lapse. Once the assessee has obtained the Form No. 15G from the payee assessee, has no legal obligation to deduct the tax on the payment made to payee - in favour of assessee.
-
2012 (11) TMI 455
Transfer pricing - arm's length price - intra-group services - selection of Comparable - TPO made the addition on various grounds - Held that:- The assessee's objections in this regard were, as such, rejected without passing a speaking order - remit this matter to the file of the ld. DRP, to be decided afresh in accordance with law on considering the aforesaid data provided by the assessee before the TPO.
-
2012 (11) TMI 454
Auction of immovable property on non payment - right of highest bidder (petitioner) - stay granted for further proceedings on appeal filled by assessee - appeal allowed without hearing the petitioner - Held that:- Proclamation of sale and holding a public auction are only the initial steps towards sale of immovable property of a tax defaulter to recover such amount through sale of his properties. The highest bidder, whose offer is accepted, during such public auction, has the responsibility to deposit 25% of the purchase money on spot, failing which, the acceptance of offer stands revoked. However, before the sale can be confirmed in favour of the highest bidder, several steps are to be completed and intervening factors to be taken into account, like within fifteen days from the date of public auction, the purchaser has to pay remaining 75% of the amount. Even then the sale is subject to confirmation and the tax defaulter, at various stages, has right either to intervene, pay off the tax or question the very proclamation i.e under Rule 60 he can apply to set aside the sale of immovable property upon deposit of the amount of tax dues, of course before the confirmation of sale. He also has a right to question any order that the Tax Recovery Officer may have passed under the schedule. Rule 86(1) provides for a statutory appeal against any such order before the Chief Commissioner or the Commissioner. Sub-rule (3) empowers the appellate authority, pending its final decision in appeal, to stay the execution of the certificate.
It was in exercise of such statutory right of appeal that the respondent No.3 carried order of the Tax Recovery Officer before the Commissioner and questioned the very proclamation of sale. When such appeal was filed, the auction was not even conducted. The petitioner was nowhere in picture. In such appeal, it is unable to find as how at least at the outset the petitioner could have been made a party. The question of joining the petitioner as a respondent in such an appeal at a later stage also would not arise since by merely being the highest bidder in a public auction, the petitioner did not get any vested right in the property. His time for depositing remaining 75% of the amount had not yet expired nor before such date he had deposited the remaining amount. Even after depositing the remaining 75% of the amount, the sale was subject to confirmation & long before such steps could be completed, the Commissioner on the very day of the public auction, had stayed the entire proceedings. Thus as Respondent No.3 had succeeded in requiring the settlement commission to entertain his application for settlement on which certain demand orders were passed & payments were also made the petitioner has made out any case for interference.
Departmental authorities are directed to return to the petitioner the amount of 25% of the bid offer deposited by him on 31.03.2000 with simple interest @ 8% per annum from such date till actual payment.
-
2012 (11) TMI 431
Penalty u/s 271(l)(c) - assessed income is a loss - Held that:- As decided in CIT v. Gold Coin Health Food (P.) Ltd. [2008 (8) TMI 5 - SUPREME COURT] explanation 4 to Section 271(1)(c) is clarificatory and not substantive & penalty can be levied even if returned income is a loss - in favour of revenue.
-
2012 (11) TMI 430
Interest on housing loan - capital gains v/s House property - Held that:- Deduction u/s 24(b) and computation of capital gains u/s 45 are altogether covered by different heads of income i.e., income from 'house property' and 'capital gains'. Further, a perusal of both the provisions makes it unambiguous that none of them excludes operative of the other. In other words, a deduction under section 24(b) is claimed when concerned assessee declares income from 'house property', whereas, the cost of the same asset is taken into consideration when it is sold and capital gains are computed under section 48.
Thus no doubt that the interest in question is indeed an expenditure in acquiring the asset. Since both provisions are altogether different, the assessee in the instant case is certainly entitled to include the interest amount at the time of computing capital gains under section 48. CIT(A) has rightly accepted the assessee's contention - in favour of assessee.
Loan transaction - Addition regarding income from the head "other sources" - CIT(A)deleted the addition - Held that:- The CIT(A) has nowhere dealt with the legal aspect of the issue i.e., whether the assessee who, called himself to be a salaried employee could raise a plea his loan transaction could be called as a 'business activity' or not even after the same had led to accrual of interest as held by the assessing authority. This vital aspect, in our opinion has escaped the consideration of the CIT(A). Thus it will be appropriate that the CIT(A) shall redecide this legal aspect - in favour of revenue by way of remand.
-
2012 (11) TMI 429
Charitable purpose u/s 2(15) - Income from property held for charitable or religious purposes - whether the provisions of Section 11(4A) were attracted to the assessee’s case - whether by rendering specific services to members and non-members for a fee, a trade, professional or similar association can be said to be carrying on a business activity?
Held that:- A survey of the decided cases shows that trade and professional associations have been held entitled to the exemption under Section 11. An association of businessmen who sold goods on hire purchase Add. CIT vs. South India Hire Purchase Association (1978 (2) TMI 59 - MADRAS HIGH COURT), an association of traders dealing in photographic and connected trades Commissioner of Income-tax v. South Indian Photographic and Allied Trades Assn ( 1983 (7) TMI 3 - MADRAS HIGH COURT) and an association consisting of Kirana Merchants Madras Kirana Merchants Association v. CIT, (1976 (8) TMI 29 - MADRAS HIGH COURT) were held by the Madras High Court to be eligible for the exemption under Section 11 notwithstanding that some of the associations charged their members fees for specific services rendered.
It is not proper to characterise the activities of the chamber as activities amounting to a business in the generally understood sense of the word, the most important feature of business being profit motive. It has not been suggested by the income tax authorities that the activities carried out by the assessee chamber were propelled by any profit motive.
In such circumstances, it is proper to view the activities as driven by a charitable motive in the sense in which a charitable purpose is defined in Section 2(15). In this view of the matter, the provisions of Section 11(4A) are not attracted to the present case and a remand to the AO for finding out whether the activities were incidental to the objectives of the trust and separate books of accounts were maintained for such business was unnecessary - in favour of the assessee.
-
2012 (11) TMI 428
Deduction u/s 80P(2)(a)(i) - rental income received by the taxpayer - Held that:- As decided in M/s. The Totgars' Cooperative Sale Society Limited Versus Income Tax Officer, Karnataka [2010 (2) TMI 3 - SUPREME COURT] the source of income is relevant for deciding the applicability of section 80P. Weightage should be given to the words "the whole of the amount of profit and gain of business" attributable to one of the activities specified in section 80P(2)(a). The income in respect of which deduction is sought must constitute the operational income and not the other income which accrues to the society.
Unless and until the letting out of property falls within the definition of banking activity, the rental income received by the taxpayer cannot be construed as operational income. At no stretch of imagination it could be said that rental income is attributable to banking business. In the present case the taxpayer has let out the building. It is nobody's case that the commercial asset was exploited in the course of its banking activity or providing credit facility to its members. Therefore, letting out of the property is other than one specified in section and u/s 80P(2)(a)(i) and 80P(2)(c). Therefore, the rental income received by the taxpayer has to be assessed as "Income from house property" and it is not eligible for deduction u/s 80P(2)(a)(i) of the Act - in favour of revenue.
-
2012 (11) TMI 427
Indo-Mauritius DTAA - contracts work - Permanent Establishment (PE) in India - Held that:- Considering the chart tabulated by CIT(A) the duration of first contract is 8 months 11 days and no preparatory work was done by the assessee in this regard as the construction designs were provided by the third party through independent contracts. DR could not controvert the finding given by the CIT(A) in this regard. Thus it becomes apparent that the duration in respect of first contract is only 8 months and 11 days, which is less than 9 months as per Article 5 of the Indo-Mauritius DTAA to constitute permanent establishment. The duration of second contract as per the above table is only 10 days and the third contract is 3 months and 14 days. Patently such duration is less than the prescribed period of 9 months. No material has been placed on record by the DR to show that there is any infirmity in the impugned order in recording the starting or completion dates of duration of such contracts.
Since the duration in all these contracts is less than nine months, obviously the mandate of article 5 cannot be activated. In the absence of any PE there cannot be any question of taxability of business profit as per Article 7 - in favour of assessee.
-
2012 (11) TMI 426
Exemption u/s 10B - Revision u/s 263 - denial of claim as activity of producing plants through tissue culture does not amount to manufacturing - Held that:- There is no specific definition of word "manufacture or produce" u/s 10B, thus that definition of 'manufacture' contained in the corresponding provisions of section 10AA would also apply qua the assessee's case vis-a-viz its manufacturing activity.
The modern day technology of tissue culture is a multifaceted activity with the help of latest biotechnological tools, wherein from one mother plant the manufacturer/producer can get thousands of plant within a short span of time, with limited space and minimum other requirements. The definition of 'manufacture' as per Section 2(r) of the SEZ Act, 2005 is incorporated in Section 10AA of the Income-tax act with effect from 10.02.2006. We conclude, in the light thereof, that the assessee's business activity of tissue culture is 'manufacture or produces' within the meaning of section 10B(2)(i) of the "Act" and Commissioner of Income Tax had wrongly held that since assessee's produce is "plant", which is a lively object, therefore, it is covered by section 2(29)BA).
Assessing Officer in finalizing the assessment had rightly granted the assessee deduction under section 10B of the "Act". It was one of the 'possible view' as per law, which could not be revised by CIT under section 263 of the Act. Consequently, once we have held that the assessee's unit is entitled to be treated to be a qualifying unit under the provision of section 10B(2)(1) of the "Act", our conclusion is that the order of the Commissioner of Income Tax revising the assessment does not withstand the test of the law. - Decided in favor of assessee.
............
|
