Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (1) TMI 842 - AT - Income TaxEligibility of the assessee to claim deduction u/s 80IB on profits earned by Noida unit - assessee to qualify as an SSI undertaking as per section 11B of the IDR Act, 1951 - Held that:- The eligibility criteria for claiming deduction u/s 80IB as an SSI unit is that it should be regarded as an SSI undertaking u/s 11B of the IDR Act, 1951. Admittedly, the assessee has been issued such a certificate by the Directorate of Industries and which is valid for the impugned year also. The said fact has not been controverted by the Revenue. Therefore, having been issued such a certificate by the concerned Ministry itself, it is obvious that the assessee fulfills all the conditions required under the said Act to qualify as an SSI undertaking. The Revenue has neither controverted the contention of assessee that not all assets qualified as plant and machinery, nor has disputed the detail of qualifying assets filed before us - the investments in plant and machinery of the Noida undertaking is well within the specified limit of ₹ 1 crore to qualify as an SSI undertaking. No merit in the contention of the Revenue that for the purpose of determining quantum of investments in plant and machinery by the assessee undertaking, investments by all undertakings owned by the assessee are to be considered. Manufacturing of buns undertaken by the Noida unit is part of confectionery item which is a prohibited item for manufacture by SSI units claiming deduction u/s 80IB, as per Schedule XI of Income Tax Act, 1961 - Held that:- We concur with the Ld. counsel for assessee that the assessee is not manufacturing a confectionery item which is prohibited as per 11th Schedule of the Income Tax Act. The meaning of word “confectionery” and “buns” as per Webster’s dictionary coupled with the fact as pointed out by the Ld. counsel for assessee that the breads and buns fall under the items which are reserved exclusively for manufacture by micro and small enterprise and which fact have not been controverted by the Revenue adequately proves the assessee’s case as rightly held by the Ld.CIT(Appeals). We, therefore, hold that the breads and buns do not qualify as confectionery items and are thus not prohibited to be manufactured by SSI units as per the 11th Schedule of the Act. Thus the assessee is an SSI unit as defined u/s 80IB(14(g) and is not manufacturing a prohibited item specified in the 11th Schedule of the Act and thus qualifies for deduction of its profits u/s 80IB as rightly held by the Ld.CIT(Appeals). - Decided in favour of assessee Deduction claimed u/s 80IC in respect of Tahliwal unit - claim reduced by AO by 10% of the amount of net profits for the reason that the assessee is manufacturing biscuits on its own account as well as doing job work for ITC Limited at Tahliwal, H.P. and further it is also manufacturing biscuits at Phillaur unit, which is not eligible for any deduction of its profits - Held that:- Undeniably, the reduction of profits to the extent of 10% has been done by the Assessing Officer on estimate basis without demonstrating by way of evidence whether any expenses on account of knowhow, goodwill, trade name, etc. had been incurred by the Phillaur unit with respect to Tahliwal unit. The same has not been demonstrated even before us. Further as rightly held by the Ld.CIT(A), the provisions of section 80IA (8) and 80IA (10) cannot be invoked in the present case in the absence of any transaction between the two units. DR has not pointed out any infirmity in the order of the Ld.CIT(Appeals) - Uphold the order of the Ld.CIT(Appeals) in deleting the reduction of profits of the Tahliwal unit by 10% of the profits - Decided in favour of assessee Disallowance of deduction u/s 80IC on job work charges - Held that:- CIT(Appeals) correctly relying upon the decision of the Hon'ble jurisdictional High Court in the case of CIT Vs. Impel Forge & Allied Industries Ltd., [2008 (12) TMI 370 - PUNJAB & HARYANA HIGH COURT] and CIT Vs. Northern Aromatics Ltd. (2005 (2) TMI 830 - DELHI HIGH COURT) held that the assessee was entitled to claim deduction on profits earned on account of job work undertaken by it - Decided against revenue disallowance out of claim of interest u/s 36(l)(iii) - e assessee could not provide the copies of accounts of various persons covered u/s 40A(2)(b)- CIT-A deleted the addition - Held that:- Hon'ble jurisdictional High Court in the case of Bright Enterprises Pvt. Ltd. [2015 (11) TMI 342 - PUNJAB & HARYANA HIGH COURT] relied upon by the Ld.CIT(Appeals) holding that no disallowance u/s 36(1)(iii) of the Act is warranted where sufficiency of interest free own funds for the purpose of making interest free advances is demonstrated - no reason to disturb the order of the Ld.CIT(Appeals) on the issue and, therefore, uphold the deletion of disallowance of interest
|