2019 (1) TMI 290

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....,244/- u/s.80IC of the Act, irrespective of the fact that the assessee company has not fulfilled the condition laid down in section 80IC(4) of the Act? 2. The appellant craves leave to add, amend or alter any of the above grounds of appeal." 2. The brief facts in this case are that the assessee-company is engaged in the business of manufacturing M.S. Steel press parts required for automobile. It has filed return for assessment year 2012-13 on 28.09.2012 declaring total income of Rs. 6,42,54,360/- after claiming deduction of Rs. 5,78,63,479/- u/s.80IC of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). The case was selected for scrutiny under CASS. The assessment u/s.143(3) of the Act was completed at Rs. 12,21....

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....uced appellant's submission as regards comparative sales and profits of the respective units i.e. Pune Unit and Rudrapur Unit. As per the said table, it appears that sales of Pune unit are increasing year-onyear (except assessment year 2010-11) and also that of Rudrapur unit. Same is the case with employment of labour, wherein, numbers of workers of both the units are increasing yearly. New machineries too appear to have been, acquired each year. Considering the different products-of the two units and increasing sales /labour / new machinery items, non-disturbance of bonafides of the Rudrapur unit by the AO for the earlier years, appears to be logical. Some other contentions are also raised by the AO as regards misleading of the figures....

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....sed various High Court decisions on the issue. It appears, the judicial views are not uniform and different interpretations are available on the point under dispute. The AR of appellant has also placed before this office a copy of the SLP dismissal in case of Sami Labs Limited on the Hon'ble Karnataka High Court's decision reported at 334 ITR 157. Now, per se, SLP dismissal 'does not add to a ratio unless the judicial thinking in stated in the order of dismissal. As per the SLP dismissal order, no any firm mandate is emanating from the said decision. The other contentions of the appellant are however, worth considering in the present case. As per facts, the deduction for earlier years are not disturbed by the Assessing ....

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....ince revenue has not suggested that there was any change in facts warranting a different view for subsequent years, disallowance cannot be made-Revenue 's appeal dismissed" In the instant case, it is clear that appellant's Rudrapur unit was passing all the tests of deduction in the earlier years including the year of formation. As such, there is no merit in the analogy of the AO that the condition with respect to formation of unit is required to be visited to the appellant every year after its formation. It is held by the jurisdictional Pune ITAT, conditions as to formation are to be tested /visited only in the first year when such a unit is formed. Thereafter, the conditions of formation are not required to be visited. In ....

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....cisions - a) ITO V. Laxmi Packers -14 SOT 303 (Mumbai) b) Arya Testurisers & Twisters V. JCIT - ITA No. 6647/Mum/2007 Here it is relevant to refer the Hon'ble Madras High Court in the case of LG Balakrishnan & Bros. Ltd. Vs. CIT [(1985) 151 ITR 270 (Madras)] wherein it has been held that "section 84(2)(ii) says that the new industrial undertaking should not have been formed by the transfer to a new building of a building, machinery or plant previously used for any purpose. If the transfer of use machinery has taken place after its formation, then, the bar under section 84(2)(ii) will not apply. But, there is a transfer of machinery and if the transfer has taken place in the process of formation or setting up o....

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....ng sales in A.Y.2012-13 even after the transfer of machinery to Rudrapur Unit. Labour employment is also increasing and even the new plant & machinery acquisition quantum is increasing. As such, the shifting of some of the plant & machinery items from Pune Unit to Rudrapur Unit, do not appear to be aimed to claim some extra/additional benefit u/s.80-IC of the ITA,1961. 5.3.5. In view of the above, considering the totality of the facts of the case, written submissions made on behalf of the appellant as well as the explanations provided by his Ld. AR during appellate proceedings and the case laws relied upon, I am of the view that the condition of the test of new machinery vis-à-vis old machinery has to be applied in the year ....