Itxa/1103/2013 Of The Commissioner Of Income Tax v. M/S. Jolly Polymers

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL (L) NO. 1622 OF 2012 The Commissioner of Income Tax, Valsad...Appellant.V/s.M/s. Jolly Polymers ..Respondent. Mr. Tejveer Singh, for the Appellant.None for the Respondent. P.C:- CORAM: J.P.DEVADHAR & M.S.SANKLECHA,JJ.DATE : 21[st] FEBRUARY, 2013. In this Appeal for the Assessment Year 2007-08 by the Revenue, the following questions have been raised for our consideration:- (1)Whether, Tribunal is right in law and on facts in holding that there is no condition precedent to obtain the factory license before starting the industrial undertaking without appreciating the fact that production cannot be commenced without obtaining the license to run the factory from the factory inspector as per Rule 4 of Factory Rules read with Section 6 of the Factory Act? (2)Whether, Tribunal is right in law and on facts in holding that assessee is eligible for deduction u/s 80IB without considering the fact that license to run the factory was not obtained on or before 31/03/2004 i. e. the cut off of starting 3-itxal-1622-2012 the industrial undertaking as per provisions of Section 80IB(4)? 2By the impugned order, the Tribunal upheld the finding of the CIT(A) holding that the Respondent-Assessee is entitled to the benefit of Section 80IB of the Income Tax Act, 1961 (the said Act). The objection of the Revenue is that as the factory license was granted on 3[rd] May, 2005, it cannot be said that the Respondent-Assessee had commenced manufacturing activity prior to cut off date 31[st] March, 2004. In the impugned order, the Tribunal relied upon its decision in the matter of ITO Vapi v/s. Samarth Health Care in ITA No.1006/Ahd/2009 dated 5[th ]June, 2012 and allowed the claim for deduction under Section 80IB of the said Act. The Tribunal came to finding of fact in the above case that the Assessing Officer did not doubt about raw material consumption, power consumption, sales and employment of workers for the purposes of denying the benefit of Section 80IB of the said Act. It was further held that for the purpose of Section 80IB of the said Act, what is essential is that the assesee should manufacture or produce an article or thing and if there is any violation of any provisions of any other statutes then the assessee has to explain the same to the authorities implementing those Acts/Statutes and the same cannot be the basis of denial of benefit under Section 80IB of the said Act. The Revenue has not been able to point out why and how the decision of the Tribunal in the matter of Samarth Health Care (supra) is inapplicable to the present facts. In any event, the CIT(A) while setting aside the order of the Assessing Officer, directs the Assessing Officer to verify the Income of the Respondent-Assessee eligible for deduction under Section 80IB before granting relief. 3In view of the above, we see no reason to entertain the proposed questions of law (1) and (2). 4Accordingly, appeal is dismissed with no order as to costs. (M.S.SANKLECHA,J.) (J.P.DEVADHAR,J.)