The present Tax Appeal preferred by the Revenue arises from the common order dated 12th November 2010 passed by the Income Tax Appellate Tribunal, Ahmedabad, Bench 'A' in ITA No.2050/06 and ITA No.2413/07 relatable to the Assessment Years 200304 and 200405 respectively. This Tax Appeal No.665 of 2001 is directed against the Tribunal's order insofar it concerned ITA No.2050/06 for the Assessment Year 200304. 2.0 The appellant has raised the following question proposing it as substantial question of law.
“ Whether the Appellate Tribunal is right in law and on facts in deleting the disallowance of claim of deduction u/s. 80IB of the Act?”
3.0 The question involved is in respect of deduction of Rs.3,71,12,970/ claimed under Section 80IB of the Income Tax Act, 1961 (hereinafter referred to as 'the Act', for sake of brevity) by the assessee. The assessee is a company engaged in manufacturing of Soft drink concentrate and Juice up products, which claimed the deduction on the basis of the purchase of various machineries like air conditioning appliances or air conditioners, blander machine, pouch packing machine, conveyor belt, weighing scale etc. during the relevant assessment year at its three units. On the basis of information gathered during the survey carried out under Section 81B of the Act on 20th August 2005 at the main office of the assessee company at Ahmedabad, the Assessing Officer took view against the assessee and held that more than 20% of the total machinery was old, and therefore, the assessee's claim for deduction was not allowable.
3.1 It was claimed by the assessee that those were the new machineries, and their value therefore would qualify under Section 80IB, which provides for deduction on that count in respect of profits and gains from certain industrial undertakings. In appeal by the assessee, the Commissioner (Appeals) was of the opinion that the Assessing Officer had erred in denying the benefit and that on proper analysis of the documents, the old machineries was of the worth of Rs.8,51,000/ which was only 4% of the total, and that the assessee would have observed limit of 20% even if he had used old machinery to the tune of Rs.49.89 lacs, as the total value of machineries installed at various units was Rs.249.50 lacs. The Appellate Commissioner allowed the deduction.
4.0 The Income Tax Tribunal confirmed the decision of the Commissioner (Appeals). While rejecting the appeal of the Revenue, it was observed that;
“... the AO has analyzed the total machineries to the tune of Rs.37,77,000/ out of which old machineries were found to be Rs.81,51,000/. The learned CIT(A) on further examination of the material evidence on record noted that the total machineries installed at various units are considered. The value of the total machineries would be Rs.2,49,50,000/, the same would be hardly 4% of the total machineries which is considered by the AO to be old machineries.”
“.... All evidences, materials, bills, invoices and statement of the parties have been taken into consideration before arriving at the finding in the matter that the plant and machineries used by the assessee in this case are new and not old. The finding of fact recorded by the learned CIT(A) as reproduced above would clearly indicate that the assessee purchased new plant and machineries and used for the purpose of industrial undertaking by fulfilling the above conditions before claiming exemption u/s.80IB of the Act.”
5.0 The Tribunal further noted that what was relied on by the Assessing Officer was not an evidence in eye of law.
“ It may also be pointed out that the learned AO noted in the assessment order that during the course of survey conducted on 28012005, Annexure A16 was found according to which the machineries were considered as used one, for the business of the assessee. The assessee however, explained that in the said papers there is no date, there is no signature and the narration in the same is “proposed plant and machinery valued at Waves Foods”. Since the above loose paper was recovered during the course of survey after close of the financial year relevant to the assessment year under appeal and it has no date, therefore, some material to indicate that the same is connected with the assessment year under, it cannot be read in evidence against the assessee in the year under appeal.”
6.0 In the above light, no error was committed by the Tribunal in dismissing the appeal of the Revenue. The finding of the Tribunal that the assessee had not used more than 20% old machineries and that the value of used machinery was only 4% of the total machineries and the other attendant findings, were based on consideration of facts and material before it, and thus were in the realm of appreciation. They are factual in nature and reasonably arrived at. No question of law arises in this Tax Appeal for consideration.
7.0 Accordingly, the appeal is dismissed.
Amit [V. M. SAHAI, J.] [N. V. ANJARIA, J.]