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TMI Blog2020 (5) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT(A) has erred in confirming disallowance of Rs. 44,76,2087- under section 80IB of the Act. The Learned CIT (Appeals) ought to have appreciated that the Appellant is engaged in business of manufacturing of mills machinery parts and chemicals has satisfied all the conditions relating to allowably of deduction u/s 80IB(3) of the Act. 1.2 On the facts and in the circumstances of the case, Hon'ble CIT(A) ought to have appreciated the fact that the Assessing officer has while making disallowance of section 80IB of the Act erred in relying on the provisional certificate of approval for SSI (Small Scale Industries) particularly when all the conditions stipulated in section 80IB(3) are duly fulfilled by the Appellant and claim of Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt & machinery previously used for any other purpose. (iii) The industrial undertaking should employ 10 or more workers when its process is with aid of power; (iv) The SSI undertaking should commence manufacturing or production of article during period 1-4-1995 to 31-3-2002. 5.3 The Appellant has relied upon Form No. 10CCB certified by Chartered Accountant for its claim that industrial undertaking has commenced operation on 16th April, 2001. It is pertinent to note that Appellant has submitted provisional registration Certificate of small scale industries dated 25th June, 2001 wherein it is stated that date of commencement of production is 1st August, 2001. When provisional certificate is issued on 25th June, 2001 and on that day prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0IB of the Act. But the same was denied by the AO for the reasons as discussed under: i. In the certificate namely small scale industries issued by the Directorate of Industries, Government of Gujarat it was mentioned that the assessee is mainly engaged in the production of photo emulsion for textile. But the assessee in the year under consideration has shown its activity as manufacturing of mills machinery parts and chemicals. Thus there was the change in the activity of the assessee. As per the AO such change in the activity of the assessee represents the splitting up or the reconstruction of a business already in existence. Thus the assessee has not complied the condition as specified in clause (i) of subsection 2 of section 80IB of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gible for the deduction under section 80IB of the Act. Since there is no change in the facts and circumstances for the year under consideration viz a viz the earlier assessment years, we are of the view that the principles of consistency need to be applied. In holding so we also draw support and guidance from the order of Mumbai tribunal in the case of Sonata software Ltd versus a CIT reported in 56 Taxmann.com 290 wherein it was held as under: "5.2 Thus, it can be seen that the claim of deduction in respect of each unit where section 10A deduction has been claimed as per chart mentioned herein above. The assessee was allowed the deduction in the initial assessment year which make fact of the case squarely covered by the decision of the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction; (iii) unless deductions allowed for the assessment year 1980-81 on the same ground were withdrawn, they could not be denied for the subsequent years. Either in section 80 HH or in section 80J there is no provision for withdrawal of special deduction for breach of certain conditions." 5.4 Considering the facts of the case in the light of the judicial decision cited herein above, in our considered opinion the claim of deduction cannot be denied unless claim is withdrawn right from the initial assessment year. Respectfully following the decisions of the Hon'ble Bombay High Court and Hon'ble Gujarat High Court, we set aside the findings of Ld. CIT(A) and direct the AO to allow the claim of deduction as made by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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