TaxTMI 
TaxTMI 
2021 (9) TMI 463
X X X X Extracts X X X X
X X X X Extracts X X X X
....amend any ground (s) of the appeal reised above at the time of hearing. 2. Briefly stated facts of the case are that the assessee company was engaged in the business of processing, preservation and packaging of dairy products. For the year under consideration, the assessee filed return of income on 30/11/2013, wherein the assessee claimed 100% deduction of income declared of Rs. 4,83,16,946/- under section 80IB(11A) of the Income-tax Act, 1961 (in short 'the Act') and declared book profit of Rs. 5,84,92,531/- under section 115JB of the Act. The return of income filed by the assessee was selected for scrutiny assessment. The Assessing Officer completed scrutiny assessment under section 143(3) of the Act on 29/03/2016 and disallowed the claim of deduction by the assessee, depreciation on plant and machinery and interest corresponding to interestfree loan given to related parties. On further appeal, the Ld. CIT(A) deleted all the disallowances. Aggrieved, the Revenue has challenged only deletion of disallowance of deduction under section 80IB of the Act. 3. Before us, the parties appeared through Video Conferencing facility and filed paper-book and other documents through email.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... "3.3.1 Following these submissions made before the undersigned dated 14.09.2016, it was considered appropriate to undertake the exercise of examining whether all the conditions required for fulfilling claim of deduction u/s 80IB(11A) had been fulfilled by the appellant as the assessment order did not demonstrate that the AO had examined the eligibility criteria qua section 80IB(11A). The eligibility criteria and the facts of the appellant's case have beep submitted by the appellant during the course of hearing along with substantiating documents, the gist of which reads as under:- SEC.80IBI11A) CONDITIONS - APPELLANT'S SUBMISSIONS 1. This deduction is available in case of an undertaking deriving profit from the business of processing, preservation and packaging of dairy products. The appellant company is engaged in the business of processing, preservation and packaging of dairy products as is evident from Certificate issued by Food Safety and Standard Authority of India enclosed (Annex:A- 1). 2. The provisions of section shall not apply to an undertaking engaged in the business of processing, preservation and packaging of dairy products if it begins to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t products and poultry or marine or dairy products. The appellant falls under the proviso to as it began operation of business after 01.04.2009. This is evident from the annual accounts of the company for the A.Y. 2010-11 wherein, for part of the year since the start of commercial production w.e.f 11.09.2009, the appellant had a turnover of Rs. 87.71 crores. The appellant had made his claim for the first time in the impugned assessment year as there were losses incurred in the preceding years. I have also perused the financials of the company for A.Y. 2010- 11 when commercial production started. I find that the appellant invested Rs. 19.79 crores in fixed assets and another 15 crores in capital work in progress. The other conditions that were applicable for the deduction u/s 80IB (2) are also found fulfilled in the appellant's case and discussed serially as under: (i) The undertaken should not be formed by splitting up or reconstruction of a business already in existence - the financials for and from A.Y. 2007-08 do not show that the company was formed by splitting up of an existing business. (ii) The undertaking is not formed by the transfer to a new business....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(2)(iv) and there should be employer - employee relationship between the assessee and the worker. The AR has brought to my notice the subsequent decision of the Bombay High Court in the case of Jyoti Plastic Works Pvt. Ltd. (ITA No.5045/2010 dated 15.11.2011) wherein, in the context of section 80IB(2)(iv) for A.Y. 1999-2000, the High Court disagreed with the views expressed by the Allahabad High Court. It has also been brought to my notice that against the order of the Bombay High Court, the department's SLP has been dismissed by the Hon'ble Supreme Court in Civil Appeal No. 1004/2014 dated 28.4.2015. These facts are also discussed in the ITAT order in the case of Jyoti Plastic Works Pvt. Ltd. for A.Y. 2011-12,(ITA No.7013/Mum/2014 dated 22.06.2016). From the decision of the Bombay High Court, it is seen that the Hon'ble High Court, in the absence of the definition of the expression 'worker' in the Income Tax Act, chose to go by the definition as per Black's Law Dictionary and u/s 2(L) of the Factories Act, 1948, that is, the expression 'worker' means a person employed directly or by or through any agency (including a contractor) with or without the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....DL dated 04.07.2008 for manufacturing, processing and packaging activities of liquid milk, as per the specification provided by it and under its supervision. The Mother Dairy guidelines for packing made by vendors and the guidelines for storing milk, testing etc. are also set out. The agreement signed between initially between Mother Dairy and Panchmahal Properties Ltd. dated 15.10.2007 (amended vide agreement dated 23.12.2008) stands assigned to the appellant with the consent of Mother Dairy dated 24.12.2008 and the assignment agreement dated 29.12.2008 between Panchmahal Properties Ltd. and the appellant meant that the appellant stepped into the shoes of Panchmahal Properties Ltd. As can be seen from the agreement between the appellant and UDL dated 04.07.2008, the factory building was to be built on land owned by UDL and with the funds of the appellant. The building was to be transferred back to the appellant at cost after the completion of construction and with the prior approval of the BIFR, but the ownership of the land would always remained with UDL. The funds and thereby the ownership over the requisite plant and equipment installed in the factory building continued to rema....
X X X X Extracts X X X X
X X X X Extracts X X X X
....venue. According to the learned counsel, when the Revenue itself has accepted the claim of the depreciation, which is allowed for putting the machinery to use of manufacturing, the argument in support of the ground of deletion of 80IB deduction that no manufacturing has been carried out are self-contradictory. The learned counsel submitted that Revenue cannot argue contrary once they have accepted the claim of the depreciation of the assessee. 5.4 In support of his contention, the learned counsel relied on following decisions: (i) Decision of Hon'ble Bombay High Court in the case of CIT Vs Jyoti Plastic Works P. Ltd. reported in 399 ITR 491 (ii) Decision of Hon'ble Delhi High Court in the case of CIT Vs Delhi Press Patra Prakashan Ltd reported in 355 ITR 14 (iii) decision of Hon'ble Madras High Court in the case of CIT Vs Elgi Ultra industries Ltd reported in 210 Taxman (204) . 5.5 The learned counsel also submitted that Assessing Officer himself in assessment year 2018-19 has allowed the claim of deduction of the assessee and, therefore, contesting the same claim for earlier year before the Tribunal by the Assessing Officer is not justified. 5.6....