TMI Blog2015 (9) TMI 1360X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee were duly audited. The claim made by the assessee was under bonafide belief that it was a small scale industry. The error on the part of the assessee had occurred due to various notifications issued by the concerned Ministry from time to time fixing the limit of investment to qualify for being small scale industry. The value of exclusive plant and machinery as on 1.4.2004 was ₹ 2.93 crores and because of the addition made in the assessment year under appeal of ₹ 58.33 lacs, the total investment came to ₹ 3.51 crores. In such circumstances, it could not be said that the assessee had not made a bonafide claim of deduction under Section 80IB of the Act. Therefore, the penalty was rightly deleted by CIT(A) and u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erroneous criteria and by importing such facts and circumstances which are contrary to record? 2. A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed The assessee was in the business of manufacturing of bulk drugs and fine chemicals. During the year under consideration, the assessee had claimed deduction under section 80IB of the Act of ₹ 29,62,491/-. It was found that the assessee had claimed its unit as small scale industry. However, investment in plant and machinery was ₹ 351.59 lacs. The assessee was asked to explain how its unit was small scale industry. Not satisfied with the reply, the Assessing Officer held that the assessee did not fulfil the condition as given u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue filed appeal before the Tribunal. Vide order dated 18.11.2014, Annexure A.3, the appeal was dismissed. Hence the instant appeal. 3. We have heard learned counsel for the appellant-revenue. 4. Learned counsel for the revenue submitted that vide Order F.No.10/6/97/1P dated 10.12.1997, the Ministry of Industry fixed the investment limit in fixed assets in plant and machinery at ₹ 3 crores in respect of a unit to be eligible as small scale industry which was amended vide order F.No.10(6)/97-1P dated 24.12.1999 and the limit of investment in fixed asset in plant and machinery thereunder was reduced from ₹ 3 crores to Rs. one crore. In such a situation, it was urged that the assessee whose investment in plant and machinery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is, it is a fact that deduction has been claimed under Section 80IB(3) in the status of a small scale industry. This was found to be incorrect as per the notification of the Ministry of Industry for small scale units. The investment in plant and machinery was found to be exceeding the prescribed limit. It is the assessee's contention that it was under bonafide belief that it was a small scale industry in view of the various confusing notifications of the Ministry which changed from time and again. It was also emphasized that the books were duly audited and that Form IOCCB was quantified after looking into the conditions for claiming the deduction. Furthermore, assessee stated that as all particulars of its plant and machinery as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed complete facts and claimed to have permanent registration as small scale unit issued by District industries Centre, Patiala. The claim of assessee was qualified by the auditor as well. The assessee referred to various notifications issued by the concerned department through which time to time, the monetary limits were varying and ultimately the last notification was also favourable to the assessee. In the case of the assessee, the value of exclusive plant and machinery as on 1.4.2004 was ₹ 2.93 crores and because of the addition made in the assessment year under appeal of ₹ 58.33 lacs, the total investment comes to ₹ 3.51 crores. It is therefore clear that the assessee was small scale industrial unit and was entitled fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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