TMI Blog2014 (3) TMI 1027X X X X Extracts X X X X X X X X Extracts X X X X ..... rescribed date. It was held that if there is any violation of any provision of any other statute then the assessee has to explain the same to the authorities implementing those statutes but the same could not be the basis of denial of benefit u/s. 80IB of the IT Act. On this reasoning as well we hereby uphold the view of learned CIT(A) in deleting the disallowance. - Decided in favour of assessee - ITA No.3335/Ahd/2010 - - - Dated:- 31-3-2014 - SHRI MUKUL Kr. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER For the Appellant : Shri O.P. Batheja, Sr.D.R. For the Respondent : Shri M.K. Patel, A.R. O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER This is an appeal filed by the Revenue arising from the order of learned CIT(A), Valsad, dated 30.09.2010 and the substantive grounds are reproduced below: 1. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in allowing the deduction u/s.80IB of the Act stating that disallowance of claim of deduction u/s.80IB of the Act on the sole ground that the assessee was not having factory license before it started manufacturing activities is without any merits. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with the return of income. 3. From the above it is clear that the industrial undertakings claiming deduction u/s. 80-IB satisfy all the conditions laid down in section 80IB and hence it is eligible for deduction u/s. 80-IB. 4. Also it very clear from the above that obtaining factory license before 31.3.2004 is not a condition for availing deduction u/s. 80-IB of the Act. 5. We would like to submit the following documents in support of our claim. a. copy of sales tax registration certificate. b. copy of SSI certificate. c. copy of power release letter. d. copy of electricity bill. e. copy of pollution control certificate. f. copy of manufacturing license issued by the dept. of Medical health adm. Daman. 2.1 The vehement contention of the assessee was that few other licenses were granted by various Government Departments well before 31st March, 2004, hence, the manufacturing was started before the specified date. On the other hand, the AO s objection was that the requirement of deduction u/s.80IB(3) was not fulfilled; hence, the claim was rejected. Being aggrieved, the matter was carried before the First Appellate Authority. 2.2 Before learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2012) 19 taxmann.com 181 (guj) 4. CIT Vs. Jitsan Enterprise, (in Tax Appeal No.2588 of 2010 (Guj) 4. We have heard both the sides. This issue revolves within a narrow compass of fact because the admitted factual position was that the assessee had applied for the license before 31st of March, 2004 and the Auditor as per the Audited Report had affirmed that the manufacturing activity had also commenced on 26th of March, 2004. However, the controversy is due to the fact that the factory license was issued by the Chief Inspector of the factory on 3rd of June, 2004. In support of the fact that the manufacturing activity was commenced before the close of the financial year ended on 31st of March, 2004, the assessee had furnished several evidences as listed above. So the basis for disallowance of deduction u/s.80IB was not that the production had not been started but the controversy was that the license was issued after the close of the said financial year; hence, the assessee s claim of start of manufacturing activity was allegedly incorrect. It is worth to mention at this juncture that in assessee s own case for A.Ys. 2005-06 and 2006-07, after appreciation of all the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80IB(4) of the Act, we cannot be oblivion to such provision. 24. In those appeals where we find that assessee had not even applied for factory license before 31.3,2004, we cannot hold that necessary conditions under sub-section(4) of Section 80IB of the Act were fulfilled . 27. However, in cases where the application for license was already made before 31.3.2004, but obtained shortly thereafter, we are of the opinion that such lapse must be viewed as one which is purely technical even without accepting the contention of the counsel for the assessee that grant of license subsequently would relate back to the original date of application. We are inclined to uphold the Tribunal's view to this extent. 28. In the result, we answer question(A) in the negative i.e. in favour of Revenue and against the assessee -We answer question(B) in the affirmative i.e. in favour of the assessee and against the Revenue. 5. We, therefore, hold that in a situation when the Hon ble Jurisdictional High Court has decided question no.(B) in the affirmative, i.e., in favour of the assessee and against the Revenue then the controversy as raised from the side of the Revenue now stood covered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of denial of benefit u/s. 80IB of the IT Act. On this reasoning as well, respectfully following these decisions, we hereby uphold the view of learned CIT(A). Even in the case of Samarth Health care (Tax Appeal No.1125 of 2010) order dated 11.01.2013 the Hon ble Gujarat High Court has opined as under: 26. In the present group of cases, however, we need not dwell on this issue at any length. Primarily we are of the opinion that while holding that assessees are not entitled to deduction under Section 80IB(4) of the Act, we are not reading into it any other requirements contained in any other Act but are reading the requirements contained in the proviso to Sub-section (4) of Section 80IB of the Act so as to require that commencement of the industrial activity must be lawful and any manufacturing activity which is fundamentally unlawful or prohibited by law and against public policy, would not be covered by said provision. 27. However, in cases where the application for license was already made before 31.3.2004, but obtained shortly thereafter, we are of the opinion that such lapse must be viewed as one which is purely technical even without accepting the contention of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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