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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI RAJENDRA & SHRI SAKTIJIT DEY
आदेश / ORDER शक्तिजीि दे, न्याययक सदस्य के द्वारा / PER SAKTIJIT DEY, J.M.
This is an appeal filed by the Department against the order dated 22nd March 2003, passed by the learned Commissioner (Appeals)–35, M/s. Bio–vet Industries 2 Mumbai, pertaining to the assessment year 2008–09. Following grounds have been raised by the Revenue:– “1. Whether on the facts and in the circumstances of the case, and in law, the Ld. CIT (A) erred in allowing deduction of Rs 8,24,335/- claimed by the assessee under section 801B of the Income tax Act 1961 for its Unit No. II without appreciating the fact that the assessee Unit No. II is only an extension of Unit No. I and therefore Unit II is not entitled for 100% education under section 801B of the Income tax Act 1961.
2. Whether on the facts and in the circumstances of the case, and in law, the Ld. CIT (A) erred in allowing deduction of Rs 8,24,335/- claimed by the assessee under section 801B of the Income tax Act 1961 for its Unit No.II without appreciating the fact that the assessee had diverted the expenses of its Unit II to Unit I and had reduced the taxable profits of Unit I and increased the profit of Unit II and claimed 100% exemption on the profit of Unit II" "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in allowing deduction under section 801B of the Income tax Act 1961 claimed by the assessee for its Unit No.II without appreciating the fact that the new unit and the old unit are an integrated single unit forming part of the activities of the assessee.
3. The appellant prays that the order of the Ld. CIT(A) on the above grounds be set aside and that of the A.O. be restored."
When the case was called for hearing, none appeared on behalf of the respondent assessee. Considering the nature of dispute, we proceed to dispose of the present appeal ex–parte qua the assessee after hearing the learned Departmental Representative and on the basis of material available on record.
M/s. Bio–vet Industries 3 3. Briefly the facts are, the assessee, a partnership firm, is engaged in the business of poultry and cattle fields. For this purpose, the assessee has seting a unit at Dhabol in Daman. For the assessment year under consideration, the assessee filed its return of income on 30th September 2008, declaring total income of ` 48,65,970. During the assessment proceedings, the Assessing Officer noticed that assessee has two units namely Unit–I and Unit–II and as far as Unit–II is concerned, the assessee has claimed deduction under section 80IB of the Income Tax Act, 1961 (for short "the Act"). The Assessing Officer, observing that deduction claimed under section 80IB for Unit– II, has been disallowed in the assessment order passed for the assessment year 2003–04 to 2007–08, by holding that Unit–II is not a new unit but an extension of Unit–I, disallowed assessee’s claim under section 80IB. Being aggrieved of such disallowance, the assessee preferred appeal before the first appellate authority.
In the course of hearing before the first appellate authority, it was submitted by the assessee that while deciding assessee’s appeal for the assessment year 2003–04, the Tribunal, vide order dated 25th February 2010, passed in and 6826/Mum./2006, has allowed assessee’s claim of deduction under section 80IB of the Act by holding that Unit–II of the assessee is a separate industrial undertaking, hence, entitled for deduction under section 80IB. It was submitted, following the order passed for the assessment year 2003– M/s. Bio–vet Industries 4 04, the Tribunal also allowed assessee’s claim of deduction under section 80IB for Unit–II in the assessment year 2004–05. The first appellate authority, after perusing the order of the Tribunal having found that the assessee’s claim of deduction under section 80IB for Unit–II, was accepted by the Tribunal, allowed assessee’s claim of deduction under section 80IB for the impugned assessment year and deleted the addition of ` 8,24,335, made by the Assessing Officer.
We have heard the learned Departmental Representative and perused the orders of the authorities below and the material available on record. As could be seen, the solitary issue in dispute in the present appeal is in relation to assessee’s claim of deduction under section 80IB of the Act for Unit–II. The Assessing Officer disallowed assessee’s claim of deduction by relying upon the assessment order passed for the assessment year 2003–04 to 2007–08. However, as could be seen from the impugned order of the learned Commissioner (Appeals), the Tribunal, while deciding assessee’s appeal for the assessment year 2003–04, allowed assessee’s claim of deduction under section 80IB, by holding that Unit–II, is a separate industrial undertaking. This decision was again followed in assessee’s own case for the assessment year 2004–05 in ITA no.5328/Mum./ 2007 and ITA no.3398/Mum./2008, order dated 8th June 2012. The finding of the Tribunal in the said order is reproduced herein below:– M/s. Bio–vet Industries 5 “5. We observe that in respect of deduction u/s 80IB of the Act of the assessee, the Tribunal considered the said issue in A.Y. 2003–04 vide its order dated 25.2.2010 in I.T. Act nos.5928 & 6826/M/2006 and has held that Unit–II is new one and is a separate industrial undertaking which is entitled to deduction u/s 80IB of the Act @ 100%. However, A.O. made the disallowance for the assessment year under consideration u/s 80IB of the Act by following his order for A.Y. 2003–04. In view of fact that the Tribunal has decided the issue in favour of the assessee to hold that Unit–II of the assessee is a separate industrial undertaking and is entitled for deduction u/s 80IB of the Act and learned CIT(A) has followed the said order of the Tribunal while allowing the claim of the assessee, we do not find any infirmity in the order of the learned CIT(A) therefore, ground 1 of appeal taken by the Department is rejected.”
Thus, as could be seen from the order of the co–ordinate bench reproduced herein above, the Tribunal holding that Unit–II, is a separate industrial undertaking has allowed assessee’s claim of deduction under section 80IB of the Act. The learned Commissioner (Appeals), having allowed assessee’s claim of deduction following the aforesaid decision of the Tribunal, there is no reason to interfere with the same which is hereby upheld. The grounds raised by the Revenue are dismissed.