2015 (10) TMI 74

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....n case of various assessees. All the impugned orders are dated 17.04.2014. 2. The common issue raised in all the appeals by the Revenue is allowing of deduction under Section 80P(2)(a)(ii) of the Incometax Act, 1961. The stand of the Revenue is that despite huge capital outlay, high turnover and large number of workers, the CIT(Appeals) has erred in allowing deduction under Section 80P(2)(a)(ii) of the Act. The assessees are not cottage industry, therefore, are not eligible for availing the benefits under the Act. The Revenue placed reliance on the CBDT Circular No.722 dated 19.09.1995, wherein it has been clarified that the cottage industry is one which is carried on a small scale with a small amount of capital and a small number of wor....

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....unal, which has been upheld by the Hon'ble Madras High Court. The relevant extract of the order of the Tribunal dated 2nd May, 2013 reads as under:- "4. We heard both sides and considered the issue before us. 5. The very same issue was considered by the Incometax Appellate Tribunal, Chennai 'C' Bench in the case of AA- 399, The Chennimalai Industrial WCS Ltd. through their order dated 26.8.2011 passed in ITA No.422/Mds/2011 for the assessment year 2007-08. The Tribunal in the said order found that the term "cottage industry" is not defined anywhere in the Income-tax Act, 1961, but the classification of a cottage industry is available under the Industrial Development and Regulation Act. The assessee-society enjoys the status of a c....

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....s. These concessions and facilities are given both by the State and Central Governments to protect the employment and interest of traditional workers and artisans in different fields of cottage industries. Handloom is a traditional industry in India deploying a large number of workers. The handloom provides substantial amount of employment to rural population and handloom is a great contributor to the rural economy. After examining all these aspects of the case, the Tribunal held that the Commissioner of Incometax( Appeals) in that case was justified in granting benefit of exemption under sec.80P(2)(a)(ii). The above view of the Tribunal has been followed in another set of appeals disposed off by the Income-tax Appellate Tribunal, Chennai '....

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....trative circular. In this regard, useful reference can be made to one such judgment of the Supreme Court in Commissioner of Central Excise, Bolapur Vs M/s Ratan Melting & Wire Industries (2008 (13) SCC 1), wherein the Supreme Court has dealt with the circulars issued by the Department vis-à-vis the decisions of the Courts and their binding nature upon the Court. It is useful to extract the said portion of the judgment of the Supreme Court, which is extracted hereunder:- 6. Circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for ....