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TMI Blog2011 (12) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned Commissioner of Income tax (Appeals-1), Surat, has erred in confirming the action of the Assessing Officer in rejecting the claim of the appellant for deduction of Rs. 4,92,6967-U/s.SOIB of the Act even though your appellant had satisfied all the conditions prescribed U/s.80IB of the Act. (3) On the facts and circumstances of the case as well as law on the subject, the Learned Commissioner of Income Tax (Appeals-1), Surat, has erred in confirming the disallowance of deduction U/s.80-IB to the appellant as there was a delay in obtaining Factory License as the compliance with the provisions Factories Act, are not relevant for allowing claim of deduction u/s 80IB." 4. The brief facts of the case on this issue till the assessment stag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nery. (vii) Credible evidence that workers were deployed and they were engaged in manufacturing activity. 2.1.2 In view of the above, the assessee stated that there was no violation of the conditions mentioned for deduction u/s.80IB. The factory licence was also issued by the Department on 12.10,2004 which shows that there was no violation of the Factory Act. The assessee argued that the delay in obtaining the factory licence is not a proof that manufacturing activity had not started. 2.1.3 The A.O. did not accept the above explanation and stated that as per the Factory Rules no premises should be used as a factory without previous permission in writing from the Chief Inspector of Factory. The A.O. argued that the assessee is guilty u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the orders of authorities below. 7. We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below and the tribunal order in assessee's own case for the assessment year 2007-08. As per this tribunal order, it was held by the tribunal that the assessee is eligible for deduction u/s 80-IB and hence to this extent, the issue involved is covered in favour of the assessee by this Tribunal order. By respectfully following this tribunal order, we direct the A.O. to allow deduction to the assessee u/s 80-IB as per law. In the result, these grounds No.2 & 3 of the assessee are allowed. 8. Ground No.4 reads as under: (4) On the facts and circumstances of the case as well as law on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccess and now, the assessee is in further appeal before us. 11. It is submitted by the Ld. A.R. that the assessee has made payment of TDS along with interest u/s 201(1A) of the Income tax Act, 1961. It is also submitted that the payees have already included this amount in the income in the respective return and paid tax and therefore, there is no loss to the revenue. An alternative contention is also raised that even if this amount is added to the total income of the assessee, the same has to be added to Gross Total Income and deduction should be allowed to the assessee u/s 80-IB on the enhanced income. Reliance is placed on the tribunal decision rendered in the case of Ramesh Industries Vs ITO in I.T.A.No. 3131/Ahd/2008 dated 21.01.2011 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion has been brought to our notice, we do not find any reason to take a contrary view and hence, by respectfully following these two tribunal decisions, we hold that for allowing deduction to the assessee u/s 80-IB, the increased income after making disallowance u/s 40(a)(ia) should be considered. Ground No.4 of the assessee is also allowed. 13. Ground No.5 is as under: (5) On the facts and circumstances of the case as well as law on the subject, the Learned Commissioner of Income tax (Appeals-1), Surat, has erred in confirming the action of the Assessing Officer in making addition of Rs. 4,9757- u/s.40A(2)(b) of the Income Tax Act, 1961. 14. With regard to this issue, it is submitted by the Ld. A.R. that the addition made by the A.O. i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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