TaxTMI 
TaxTMI 
2013 (5) TMI 175
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....y traded, as manufacturing on such large scale was not possible with such meagre consumption of power. It is prayed that the order of the Assessing Officer may be restored and order of the Ld. CIT(A) may be set aside." 3. The only grievance of the Department in this appeal relates to deletion of disallowance of Rs. 19,70,650/- made by the Assessing Officer u/s 80IB of the Income-tax Act, 1961 (herein referred as "the Act" ). 4. The facts of the case in brief are that the assessee was engaged in textile business under the name and style of M/s Sidharth Swadeshi Mills, Balotra for printing work and filed its return of income declaring loss of Rs. 57,960/- after claiming deduction u/s 80IB of the Act to the extent of business profit of Rs. 19,73,127/-. The case was selected for scrutiny. The Assessing Officer framed an assessment at an income of Rs. 19,70,650/- and disallowed deduction claimed by the assessee u/s 80IB of the Act. The Assessing Officer while disallowing the claim of the assessee u/s 80-IB of the Act observed that the assessee had incurred fuel and electricity expenses of Rs. 4,51,982/- and Rs. 1,32,584/- respectively on the turnover of Rs. 5,19,78,297/-. He fu....
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....nder: "9. After considering the rival submissions and material on record, it is noticed that the issue involved in the present appeals is identical to the issue involved in the appeals of the department in the case of ITO, Ward, Balotra Vs. M/s P.T.M. Industries [supra]. On similar issue having identical facts, relevant findings have been given at paras 25 to 28 of the order dated 20.12.012 in the case of ITO, Ward, Balotra Vs. M/s P.T.M. Industries [supra] which read as under: 25. We have considered the submissions of both the parties and carefully gone through the materials available on record. In the present case, the assessee claimed the deduction u/s 80IB of the Act. The provisions contained in the section 80IB(2) of the Act which are essential to claim the deduction u/s 80IB(5) of the Act are following:- "Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings. ...... 80-IB. (2) This section applies to any industrial undertaking which fulfils all the following conditions, namely:- (i) it is not formed by splitting up, or the reconstruction, of a business already in existence : Provi....
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....ower, or employs twenty or more workers in a manufacturing process carried on without the aid of power." 26. From the above provisions it is clear that the first condition to be fulfilled is that the assessee shall not be formed by splitting or reconstruction of a business already in existence. In the present case, nothing was brought on record to substantiate that the assessee was formed by splitting or reconstruction of a business already in existence. The assessee installed its machinery at the premises situated at E-4, Ist Phase, Industrial Area, Baltora and E-3, RIICO, Industrial Area, Phase-3, Balatora for manufacturing of "Poplin" from grey cloth. The ld CIT(A) categorically stated in para 6.6 of the impugned order that Balora is in Barmer Dsitrict which is declared as industrially backward district as per Notification No.714 (E) dated 7.10.1997 issued by the CBDT in accordance with the provisions of section 80IB(5) of the Act. The assessee installed plant and machinery in the preceding years relevant to the assessment years 2003-04 and 2004-05, so there was no merit in this contention of the ld DR that the machinery was installed in the month of February 2005 and it was ....
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.... the assessee fulfilled the condition of employing more than 10 workers and manufacture the goods with the aid of power. The assessee deducted ESI on the payment of wages to the workers and ESI Act is applicable on the factory which is established and engaged in manufacturing of goods by employing more than 10 workers. In the present case, the assessee obtained a certificates from the Department of Factory and Boiler showing that the assessee was having 12 workers, utilized the power up to 4 H.P. for manufacturing of finished goods. The said certificate is not doubted at any stage, therefore, the assessee also fulfilled the fourth condition laid down in section 80IB(2) of the Act to claim the deduction u/s 80IB(5) of the Act. In the present case, the main objection of the Assessing Officer for denying the deduction u/s 80IB of the Act was that it was not possible for the assessee to achieve the turn over of Rs. 8,01,81,703/- with electricity consumption of Rs. 70,982/- only. In this regard, the explanation of the assessee was that apart from the electricity expenses of Rs. 70,640/-, generator expense of Rs. 1,23,355/- were incurred which were sufficient to run 4 H.P. machine requir....
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....wed for the year under consideration as per ratio laid down by the Hon'ble Jurisdictional High Court in the case of M/s Grace Exports, Amberi, Udaipur Vs. ITO, Ward-2(1), Udaipur (supra), wherein it has been laid down as under:- "In view of what has been found hereinabove in Question No.1 there appears no necessity of much dilatation on Question No.2. Suffice is to observe that if the benefits have been granted for the above year 2003-04 under section 10-B of the Act; and the benefit is available for a block of 10 years, it cannot, ordinarily, be withdrawn when the nature of work and benefit remain the same." 27. In the present case also, the deduction u/s 80IB is available for ten consecutive assessment years and the assessee claimed the deduction first time for the assessment year 2004-05, therefore, the benefit was available to the assessee for the year under consideration when nothing was brought on record to substantiate that there was change in the activities and nature of the work of the assessee for the year under consideration vis-a-vis the preceding year i.e. 2004-05. Similar view has also been taken by the ITAT, Lucknow 'B' Bench in the case of Tahreem Electricals ....