Case Law Details
DCIT Vs Pool Thevar Marimuthu (ITAT Chennai)
The Assessing Officer alleged that assessee has used old plant and machinery previously used in the unit of M/s. Arun Plasto Moulders Private Ltd at Rs.31 ,20,023/- out of total plant and machinery installed at new unit of Rs.59,81,123/- and the said used plant and machinery is more than 50% of total machinery installed in new unit, which is beyond the prescribed limit of 20% in Explanation 2 of section 80(IA)(3) r.w.s. 80IC of the Act. The assessee has filed various details to prove that computation of percentage of used machinery by the Assessing Officer is incorrect. We find that the learned CIT(A) has recorded categorical finding that the Assessing Officer has inadvertently adopted total plant and machinery installed at Haridwar unit at Rs.59,81,123/- as against total plant and machinery installed at Rs.2,05,36,114/- . If the total value of plant and machinery installed at new unit is taken into consideration for computing old plant and machinery, then it works to 15.19%. We further noted that the Assessing Officer has reproduced the plant and machinery installed at new unit at Haridwar, as per which as on 31.03.2012, the assessee has installed total plant and machinery worth Rs.2,05,36,1 14/-, out of which used plant and machinery taken from APMPL is at Rs.31,20,023/-. If the amount of Rs. 31 ,20,023/- being value of old plant and machinery as mentioned by the Assessing Officer is compared to total plant and machinery installed at new unit at Rs.2,05,36,114/-, the same would be worked out to 15.19% only, as against more than 50% as observed by the Assessing Officer in her assessment order. Further, the learned DR has vehemently argued the issue of transfer of used plant and machinery on the ground that learned CIT(A) has wrongly adopted total plant and machinery installed as on 31 .03.2012 instead of plant and machinery as on 31.03.2011. The learned DR further submitted that of plant and machinery should be considered when the unit was first claimed deduction u/s.80IC of the Act. In this case, the assessee has claimed deduction for the first time in the financial year 2010-11 relevant to the assessment year 2011-12 and hence, total plant and machinery installed at the end of financial year 2010-11 needs to be considered.
Even if, the plant and machinery installed at new unit is considered as on 31.03.2011, then also assessee has invested a sum of Rs.1,82,32,810/- as on 31.03.2011 and if amount of used plant and machinery at Rs.31,20,023/-, is considered to total investment in plant and machinery as on 31.03.2011 at Rs.1,82,32,810/-, the percentage works out to Rs.17.11%, which is well within the percentage specified in Explanation 2 of section 80(IA)(3) rws 80IC of the Act. Therefore, we are of the considered view that on this count also reason given by the Assessing Officer to deny deduction claimed u/s.80IC of the Act fails.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
These two appeals filed by the Revenue are directed against the order of the learned CIT(A)-4, Chennai dated 09.10.2019 and pertains to assessment year 2012-13 & 2013- 14. Since, facts are identical and issues are common, for the sake of convenience, these appeals were heard together and are being disposed off by this consolidated order.
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