9911796707
TMI Blog2012 (5) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... achinery were continued to be used in the new expansion. The A.O. gave the following reasoning for rejecting the claim of the assessee u/s.80I:- "The above submission of the assessee company has been duly considered but it was not found acceptable. From the above reply of the assessee, it is noticed that assessee has been already running an existing Dispersant Unit since F.Y. 1976-77 when the capacity of the unit was 6000MTPA. Subsequently, in F.Y. 1983- 84, the capacity was increased from 6000 MTPA to 9000 MTPA and again in F.Y. 1986-87, the capacity was increased from 9000 MTPA to 12000 MTPA. The Phase IV being the 4th expansion took place in F.Y. 1990-91, when the capacity was increased by 4000 MTPA and the total capacity becomes 16000 MTPA after the expansion. The assessee's contention that by expanding the capacity it has installed new industrial unit is not tenable. Dispersant Capacity (MT) F.Y. Commissioned Last F.Y. for benefit u/s.80I claimed by assessee Phase I Unit 6000 1976-77 1983-84 Phase II Unit 3000 1983-84 1990-91 Phase III Unit 3000 1986-87 1993-94 Phase IV Unit 4000 1990-91 1999-2000 4.5 From the reply of assessee, it is clear that mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant and machinery vis-à-vis the investment in new plant and machinery is not known. Nevertheless, it can be said that the expansion has been set up by utilizing the old plant and machinery of the existing plant. Accordingly, besides the reasons mentioned in A.Y. 1995-96, assessee is not entitled for the deduction u/s 801A in respect of expansion of Dispersant Unit - Phase IV, for these reasons." 3. The original 'Dispersant unit' was commissioned in the Financial Year 1976-77 with the capacity 6000 MTPA. Phase-wise capacity was increased in 1983-84 and then in 1986-87 and further capacity of 4000 MTPA was increased in the Financial Year 1990-91. The A.O. rejected the claim of the assessee by giving the reason that even if the capacity of Dispersant unit has been increased from 12000 MTPA to 16000 MTPA by adding balancing equipment in the existing unit but that cannot be said to be a setting-up a new industrial unit which can be entitled to deduction u/s.80IA. The assessee carried the issue before the Ld. CIT (A) but only with disappointment as the Ld. CIT (A) approved the findings of the A.O. by his cryptic observation. Now, the assessee is in appeal before us. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; (iii) Associated Cement Co. Ltd. - 118 ITR 406 (Bom) 5. He further submits that on merit also the issue is covered in favour of the assessee in view of the decision of the Hon'ble jurisdictional High Court in the case of CIT vs. Associated Cement Co. Ltd. 118 ITR 406 in which, on the identical set of facts the deduction u/s.115C of the 1922 Act which was pari materia to the section 80J of 1961 of the I.T. Act was allowed. He, therefore, pleaded for allowing the deduction. We have also heard the Ld. D.R. who have supported the orders of the authorities below. 6. We find that the issue in controversy relates to the 4th stage of expansion of the Dispersant unit, which was commissioned in the Financial Year 1990-91, which increased production capacity by 4000 MTS. The assessee claimed the deduction u/s.80I for the first time in the A.Y. 1991-92. We have already given the facts in respect of the claim of deduction hereinabove. We find force in the arguments of the Ld. Counsel. For the first time in the A.Y. 1995-96 the A.O. was of the opinion that the expansion of the Dispersant unit of 4th stage made in 1991, was not eligible for deduction u/s.80I. In the origina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he return for the A.Y. 2000-01 and if so allow the same as per the provisions of sec.43B. Accordingly, ground no.4 is allowed for statistical purposes. 11. Ground no.5 is in respect of inclusion of an amount of sale of waste oil/scrap drum of Rs.52,43,907/- in the total turnover for the purpose of computation of deduction u/s.80HHC. 12. We have heard the parties. The Ld. Counsel submits that in assessee's own case for the A.Y. 1996-97 the Tribunal has decided this issue in favour of the assessee. We find that in assessee's own case for the A.Y. 1996-97 (ITA no.2436/M/2000) order dated 22.02.2007, copy placed at page nos.141 to 152 of the compilation, the Tribunal has allowed the claim of the assesssee. But in view of the principles laid down in the case of K. Ravindranathan Nair 295 ITR 228 (SC) the sale of Waste Oil and Scrap has to be included in the total turnover for computing the deduction u/s.80HHC, as admittedly the said amount is also included in the profits of the business. We do not find any infirmity in the order of the Ld. CIT (A) and we accordingly confirm the same on this issue. Accordingly, ground no.5 is dismissed. 13. So far as ground nos. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
