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2015 (9) TMI 1283 - ITAT CHENNAI

2015 (9) TMI 1283 - ITAT CHENNAI - TMI - Claim of deduction u/s 80IB denied - treatment to both the units as one and the same - Held that:- Merely because the second unit was shown as branch unit or expanded unit, it cannot be said that the branch unit is not an independent unit. In fact, the injection moulded plastic components are manufactured at 55-D, SIDCO Industrial unit. This method is not used in the main unit. This Tribunal is of the considered opinion that both units are functioning dif .....

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t are separate and independent one, therefore, the authorities below are not justified in rejecting the claim of the assessee u/s 80IB of the Act. Accordingly, the orders of the authorities below are set aside and the Assessing Officer is directed to allow the claim of the assessee u/s 80IB of the Act. - Decided in favour of assessee. - ITA No. 1015/Mds/2014, ITA No. 399/Mds/2015 - Dated:- 17-7-2015 - N R S Ganesan, JM And A Mohan Alankamony, AM, JJ. For the Appellant : Shri T Banusekar, CA For .....

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on is claim of deduction u/s 80IB of the Act. 3. According to the ld. Representative, the assessee is engaged in the business of manufacturing and sale of plastic cans and containers. The assessee-company was registered as a small scale industry by the Directorate of Industries, Tamilnadu. The copy of the registration certificate is available at page 2 of the paper book. Referring to the letter dated 9.9.2004 by General Manager, District Industries Centre, Thiruvallur, the ld. Representative poi .....

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ed ₹ 3 crores, so the assessee continues to be a small scale industry eligible for deduction u/s 80IB of the Act. The Assessing Officer simply referring to provisions of section 80IB(3) of the Act found that the cost of plant and machinery is not less than ₹ 1 crores therefore, the assessee is not eligible for deduction u/s 80IB of the Act. The certificate issued by the Industries Department of Government of Tamilnadu was not considered by the lower authorities. Referring to the prov .....

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placed his reliance on the judgment of the Hon'ble Karnataka High Court in Ace Multi Axes Systems Ltd vs DCIT in I.T.A.No. 477 of 2013 dated 28.7.2014 , a copy of which is available at page 8 of the paper book. The ld. Representative also placed his reliance on the decision of Chandigarh Bench of this Tribunal in Micro Instruments Co. vs ITO [2008] 12 DTR 501. The ld. Representative has also placed his reliance on the decision of the Hyderabad Bench of this Tribunal in Sawaria Pipes (P) Ltd .....

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two units are not independent and separate, therefore, the claim of the assessee for the second unit cannot be allowed. According to the ld. DR, both units are owned and controlled by the assessee therefore, the assessee cannot be construed as having separate and independent unit for the purpose of claiming deduction u/s 80IB. The ld. DR placed his reliance on the decision of this Tribunal in M/s Caress Beauty Care Products Pvt. Ltd vs CIT in I.T.A.No. 79/Mds/2011 dated 15.1.2013 , a copy of whi .....

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at the investment in plant and machinery was at gross value of 212.71 lakhs as on 31.3.2009. Accordingly, the Assessing Officer found that the assessee is not eligible for deduction u/s 80IB since the investment exceeded ₹ 1 crores. Apparently, the Assessing Officer placed his reliance on the guidelines issued under Industries (Development and Regulation) Act, 1951 for small scale industries. Both the authorities below overlooked the power delegated to State Industries Department and the c .....

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quot; 7. The Hyderabad Bench of this Tribunal in the case of Sawaria Pipes (P) Ltd. (supra), after considering the notification issued by the Government of India under the Industries (Development and Regulation) Act, 1951, found that if the investment on fixed plant and machinery of a small scale industrial undertaking as on the last day of the previous year does not exceed ₹ 3 crores, it is entitled for deduction u/s 80IB of the Act. In the case before the Hyderabad Bench of this Tribunal .....

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ligible for deduction u/s 80IB of the Act. In this case, admittedly, the investment in plant and machinery is only ₹ 212.71 lakhs as on 31.3.2009, therefore, this Tribunal is of the considered opinion that the assessee continues to be a small scale industry as on the last day of the previous year hence, it is eligible for deduction u/s 80IB. This Tribunal is of the considered opinion that when the Central Government delegates its power to State Government under (Industries and Delegation) .....

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stries shows that the main unit manufacturing blow moulded plastic containers only. The branch unit manufactures injection moulded plastic buckets only. The branch unit, in addition to the above, manufacturing injection moulded plastic components such as pails and buckets made out of HD, Ld. and PP material and blow moulded plastic barrels, drums and containers. In fact, the methods of production in main unit at 271, SIDCO Industrial Estate and the method in the branch unit at 55D, SIDCO Industr .....

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