TMI Blog2012 (10) TMI 471X X X X Extracts X X X X X X X X Extracts X X X X ..... - against the assessee. - S.A. No. 71/Hyd/2012 & ITA No. 141/HYD/2012 - - - Dated:- 9-7-2012 - Chandra Poojari And Asha Vijayaraghavan, JJ. Appellant by : A. V. Raghuram Respondent by : P. Peerya ORDER Per Asha Vijayaraghavan, J.M.: By this stay application the Assessee seeks stay of collection of outstanding demand of ₹ 16,16,44/-.The Applicant has requested for stay of demand of the taxes till the disposal of appeal by the Tribunal on the ground that, the applicant has a good case on merits and has already paid an amount of ₹ 16,16,044/-. 2. After considering the arguments of both the parties and perusing the record, we have taken up the corresponding appeal of the assessee for disposal. IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted . 5. The Assessing Officer therefore was of the view that to claim deduction under Section 801B (2) (iii), the following conditions are necessary for the eligibility to claim as Small Scale Industry: I. Assessee claiming deduction should be a Small Scale Industrial undertaking: II. Profits and Gains should be derived from manufacturing or production of articles or things not being any article or thing specified in the list in the 11th schedule. III. Production or manufacturing activity should have been started at any time during the period beginning on the 1st day of April, 1995 and ending on 31st day of March, 2004. IV. The book value of the Plant and Machinery should not exceed ₹ 3 Crores for the assessment year u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opment and Regulation Act (lOR Act) as provided in Section 8018 of the Income Tax Act relating to definition of Small Scale Industry (SSI). The company was registered under SSI on 20-03-1999 vide provisional registration No. 01-22-94721 dated 20-03-1999, The initial As'st. year is 2003-04. The investment in plant and machinery as on 01-04-2007 i.e.,- closing balance as on 31-3-2007 as per the last years audit report In Form 10CCB (as per lOR Act) 2,48,67,620.00 Add: Further investment in plant and machinery During the financial year 2007-08 (as per IDR Act) 1,61,44,285.00 Total investment in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification of Small Scale: Industry vide S.0.857 (C) dt. 10-12-1999 and as per the condition specified u/s.80IB(2)(JJi), the assessee has failed to satisfy the conditions laid down as per provisions of the section. As the assessee company failed to satisfy the conditions the company is not to be treated as Small Scale Industry to claim deduction u/s.80IB of the I.T.Act. Hence, the deduction claimed amounting to ₹ 71,93,135/- was disallowed and the same was added to the Total Income Returned. 9. Aggrieved, the assessee preferred the appeal before the CIT(A) and relied on the submissions made vide letter dated 12/08/2010 before the AO. The assessee further submitted Without prejudice to above it is submitted that even if there is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requirement of being a small scale industrial undertaking applies to the initial assessment only and thereafter deduction u/s 80IB is to be allowed for the next consecutive assessment years, without any reference to its assets base, the CIT(A) following the decision of the ITAT, Pune in the case of Samruddhi Industries Ltd. (supra) held that the assessee is not eligible for claiming deduction u/s 80IB in the AY 2008-09 as it has failed to satisfy the conditions laid down therein on the last day of the relevant previous year and could not have been treated as a small scale industry for claiming such deduction. He accordingly, upheld the disallowance of claim of deduction of ₹ 71,93,135/- u/s 80IB made by the Assessing Officer. 13. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xed assets in Plant and machinery, whether on ownership basis or on lease or hire purchase, should not exceed ₹ 3 crores. However, it is clear that in the assessee s case, the assessee had total investment in Plant Machinery of ₹ 4,10,11,904/-, besides the Plant and machinery of others put to use in its case was of ₹ 1,06,62,195/-. The assessee also had Plant Machinery of ₹ 4,19,13,872/- which had not been put to use. The total WDV of plant machinery of ₹ 9,40,00,858/-, therefore, much exceeded the limit of ₹ 3 crore applicable to an SSI on the last day of the previous year. Accordingly, we are of the opinion that the assessee cannot be considered as a Small Scale Industrial Undertaking within ..... X X X X Extracts X X X X X X X X Extracts X X X X
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