2012 (7) TMI 699 - AT - Income Tax

Validity of initiation of re-assessment proceedings u/s. 147 - allowance of excess deduction u/s. 80IB(5) - Held that:- As the assessment was reopened on noticing that excess deduction to u/s. 80IB(5) was granted to the assessee. This re-opening of assessment is falling under the purview of clause (b) to Explanation 2 to proviso 2 of section 147 and considering the ratio laid down by the tribunal in the case of M/s. Kernex Micro Systems (India) Ltd. [2012 (7) TMI 647 - ITAT HYDERABAD ]that where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the AO that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return, the AO is entitled to reopen the assessment no infirmity in the order of the CIT(A) - against assessee.

Disallowance of deduction claimed u/s. 80IB - AO stated that assessee was not manufacturing any new article or thing as required u/s. 80IB - Held that:- When the change or a series of changes lakes one commodity to the point where commercially it can no longer be regarded as the original commodity, but instead is recognized as a new and distinct article, then it can be said that 'manufacture' takes place. In the present case, the assessee had broken the boulders in small pieces, but there is no change in the composition of the boulder. Only the big size had been reduced to small size. So, it cannot be said that breaking of boulders into small pieces of stone is a manufacturing activity - the assessee has not carried on the integrated activity of mining, processing and polishing and it is engaged only mining and crushing into small pieces - against assessee.

Dis allowance of claim for grant of TDS - Held that:- If the TDS is relating to the assessment year under consideration and AO whenever determines an amount of tax due from the assessee, he should consider the TDS certificate relevant to assessment years under consideration. Accordingly, we direct the Assessing Officer to consider the TDS certificate filed by the assessee relating to these assessment years and give credit for the same - in favour of assessee.

Disallowance being employee share of contribution to PF - Held that:- As decided in CIT vs. ANZ Information Technology Pvt. Ltd. [2007 (7) TMI 169 - KARNATAKA HIGH COURT ] that as contribution made towards provident fund belatedly but before the due date of furnishing return of income u/s. 139(1) dis allowance need to be deleted - in favour of assessee.

Levy of interest u/s. 234B and 234C - Held that:- As Levy of this interest is consequential and mandatory in nature and interest has to be computed by the AO in accordance with law - against assessee.