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The Commissioner of Inocme Tax Versus Babul Products Pvt. Ltd.

2016 (8) TMI 776 - GUJARAT HIGH COURT

Rejection of book result - estimation of sale and G.P - Held that:- The books of accounts of the assessee were periodically checked by the revenue authorities. It appears that in the subsequent year i.e. in assessment year 199596, the same G.P. rate has been accepted by the Department. It is a fact that the cost of raw materials has increased. It is also seen that 100% goods are sold to its sister concern and therefore the question of GP does not arise. The A.O. could not find that the assessee .....

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cise Department on behalf of its sister concern - Held that:- The assessee company exclusively marketed its product through its sister concerns namely Babul Marketing and Babul Agencies. Accordingly assessee company collected excise duty and paid the same to the Central Excise Department as against the collected dues from these parties. The excess payment was made. The assessee route collection and payment of excise duty through its trading and profit and account. In this view of the situation, .....

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all these appeals are being heard and decided together by this common oral judgment. 2. Tax Appeal No.1249 of 2007 challenges the order dated 22/12/2006 made by the ITAT in ITA No.1406/Ahd/1999 and came to be admitted on the following question of law: Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by the CIT (A) deleting the addition of ₹ 67,27,920/made by the Assessing Officer by rejecting the book result of the assessee and estimating sale and .....

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Schedule (section 80IA(2)()iii); [b] the assessee had employed less than 10 workers in the manufacturing process which was carried out with the aid of payment; and [c] the investment in plant and machinery had exceeded the permissible limit of ₹ 60 lacs? 4. Tax Appeal No.1251 of 2007 challenges the order dated 22/12/2006 made by the ITAT No.ITA NO.963/Ahd/1997 and came to be admitted on the following question of law: Whether the Appellate Tribunal is right in law and on facts in confirmin .....

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Officer u/s.80IA on the ground that the aggregate value of plant and machinery exceeded ₹ 60 lacs and that the undertaking did not employ the prescribed number of workers? 6. Insofar as the question raised in Tax Appeal No.1249 of 2007 is concerned, it is a matter of record that the assessee did maintain all the Registers, verification of which had duly been made by the A.O. The books of accounts of the assessee were periodically checked by the revenue authorities. It appears that in the .....

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unts of assessee. Hence, the CIT (A) and Tribunal were justified in deleting the addition. Both the authorities below have considered the materials placed before them and we see no reason to interfere with the same. Accordingly, we answer the issue raised in Tax Appeal No.1249 of 2007 in favour of the assessee and against the Department. 7. Now, insofar as, the questions raised in Tax Appeal No.1250 of 2007 and Tax Appeal No.1253 of 2007 are concerned, in paragraph No.14 of its judgment, the Tri .....

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39; is to use the services of a person in return for payment. Clause (iv) of s. 801 (2) of the Act does not contemplate the additional requirements - which have been read into the same by the CIT. As long as the industrial undertaking manufacturers articles or things; and where the manufacturing process is carried on without the aid of power, it employs twenty or more workers, the requirements of the provision are fulfilled. When the provision is clear and unambiguous, there is no need to read a .....

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al was right in coming to the conclusion that the persons doing the work were employed by the assessee because the assessee was controlling not only the work to be done by those persons but also the manner of doing of the work. The Court further held that the Assessing Officer and the AAC were not right in holding that the concerned persons were not employees because they were being paid on piecerate basis or job work basis. In the present case, the Tribunal has found that the assessee has the u .....

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he extent that if number of workers employed by labour contractors is included then the number of workers employed by see is sufficient for fulfillment of the condition laid down in this regard. In our view of the situation, we hold that assessee has fulfilled the requirement of minimum number workers employed in the manufacturing process for the purpose of eligibility of deduction under section 80IA. The grant of depreciation on the items excluded by CIT (A) from plant and machinery become irre .....

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held by CIT (A) that the excluded items are eligible for depreciation at different rate. In view of above discussion, grounds no.4 & 5 are allowed for statistical purposes. 7.1 In above view of the matter, when the issue was discussed at length by the Tribunal, this Court is in complete agreement with the said findings. The Tribunal has rightly come to the conclusion by considering the material placed before it. Accordingly, we answer the issue raised in Tax Appeal No.1250 of 2007 and Tax A .....

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on portion of paragraph No.13 is very relevant which reads thus: 13. … Looking to the issue from above point of view it has to be held that cars, trucks, dead stock, pumps, etc. cannot be said to be plant and machinery for the purpose of determining cost of project for treating the assessee as small scale industrial concern. However, here the claim of assessee is that such plant and machinery is ₹ 45,30,678/and not ₹ 59,52,720/. In this view of the situation, we consider it ju .....

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