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2017 (2) TMI 951 - AT - Income TaxDeduction claim raised u/s.80IB denied - whether or not the assessee is a small industrial undertaking u/s.80IB(3) of the Act in view of the fact that cost of its plant and machinery for the year under consideration comes to ₹ 92,92,711/- in excess of ₹ 60lacs? - Held that:- We find from the paper book that small scale industrial scheme comprised in pages 23 to 28 prescribe such an investment limit to be of ₹ 60lacs in the year 1991 as revised to ₹ 300lacs in December 1997. We also notice at page 14 of the paper book that assessee’s concern M/s. Nandeshwari Packaging manufacturing HDPE / P.P. bags at Vatva has already been treated as a small scale industrial undertaking by the District Industries Centre, Ahmedabad Authority. Learned Departmental Representative fails to rebut all this factual position. We thus hold that the assessee’s industrial undertaking in question is a small scale industry so as to be eligible for Section 80IB deduction in question - Decided in favour of assessee. Manufacturing and administrative expenses disallowance - Held that:- CIT(A) was correct to restrict the impugned disallowance to 10% of the telephone and vehicle expenses only as per his order in assessment year 2005-06. Both the learned representatives thus indicate that the said findings on the very issue in preceding assessment year have attained finality for want of challenge. We appreciate this fair stand to confirm the ld. CIT(A)’s action under challenge in the instant ground raised at Revenue’s and assessee’s behest. Disallowing deduction claim raised u/s.80IB - the assessee filed its audit report/form 10CCB in course of the lower appellate proceedings than that with its return - Held that:- CIT vs. Punjab Financial Corporation [2001 (12) TMI 50 - PUNJAB AND HARYANA High Court] has overruled its former decision hereinabove to conclude that such an audit report need not be mandatorily filed with a return of income. There is admittedly no other objection on part of the CIT(A) to decline the impugned deduction claim. We accept assessee’s arguments accordingly to direct the Assessing Officer to delete the impugned disallowance. Disallowance of expenditure in the nature of consumption of stores and spares - Held that:- The item of expenses to be in the nature of grooved sleeve with water cooling jacket, plastic extension spares in the nature of screw & barrel and cheese winders; respectively. We afforded ample opportunity to learned Departmental Representative to prove from the case records that the same in any way amounted to purchase of altogether new machines or the said items have resulted in increase in assessee’s production in question. He failed to point out any such material. We thus observe that the impugned items are nothing but regular wear and tear replacements to assessee’s already existing machinery liable to be treated as revenue expenditure. We accordingly accept assessee’s instant substantive ground and direct the Assessing Officer to delete the impugned disallowance.
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