I.T.A No. 266/Coch/2010 (Assessment Year: 2007-08) and I.T.A No. 281/Coch/2010 (Assessment Year: 2007-08). Case: 1. Midas Polymer Compounds Pvt. Ltd. Midas Marketing Bldg Varisserry, Mariathuruthu PO Kottayam-686 027, 2. The A.C.I.T., Cir. 1 Kottayam Vs 1. The A.C.I.T., Cir. 1 Kottayam, 2. Midas Polymer Compounds Pvt. Ltd. Midas Marketing Bldg Varisserry, Mariathuruthu PO Kottayam-686 027. ITAT (Income Tax Appellate Tribunal)
| Case Number | I.T.A No. 266/Coch/2010 (Assessment Year: 2007-08) and I.T.A No. 281/Coch/2010 (Assessment Year: 2007-08) |
| Judges | Shri N.R.S. Ganesan, J.M. and Shri B.R. Baskaran, A.M. |
| Issue | Income Tax Act, 1961 - Sections 31(i), 80IB |
| Judgement Date | September 18, 2012 |
| Court | ITAT (Income Tax Appellate Tribunal) |
Order:
N.R.S. Ganesan, J.M., (Cochin Bench)
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Both the appeals of the taxpayer and the revenue are directed against the order passed by the Commissioner of Income-tax(A)-IV, Kochi dated 17-02-2010 and pertains to assessment year 2007-08. Therefore, we heard the appeals together and dispose of the same by this common order. Let us first take the taxpayer's appeal in ITA No. 266/Coch/2010.
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The first ground of appeal is with regard to disallowance of deduction u/s 80IB in respect of income earned from mixing of rubber for third parties.
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We have heard the ld. representative for the taxpayer and the ld. DR. Admittedly, the very same issue was considered by this Tribunal in the taxpayer's own case for earlier assessment year in ITA No. 375/Coch/2006 dated 25-09-2008. Both the authorities below have considered this decision of the Tribunal in the taxpayer's own case for the earlier assessment year and found that the taxpayer is not eligible for deduction u/s 80IB of the Act. It is not the case of the taxpayer that the decision of this Tribunal in the taxpayer's own case for earlier assessment year was reversed by the High Court. In the same set of facts, this Tribunal has found that the taxpayer is not eligible for deduction u/s 80IB for earlier assessment year. Therefore, the decision of the coordinate bench in the taxpayer's own case would be binding. Accordingly by following the order of this Tribunal in taxpayer's own case for the earlier assessment year and for the reasons stated therein we uphold the disallowance and confirm the order of the Commissioner of Income-tax(A) on this issue.
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The next ground of appeal is with regard to deduction u/s 80IB in respect of interest on the security deposit with the Electricity Board.
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We heard the ld. representative for the taxpayer and the ld. DR. This issue was considered by the Apex Court in the case of Pandian Chemicals Ltd vs. Commissioner of Income-tax (2003) 262 ITR 278 (SC) and held that interest on electricity board deposit is not eligible for deduction u/s 80IB of the Act. Respectfully following the judgment of the Apex Court in the case of Pandian Chemicals Ltd (supra) we uphold the order of the lower authorities.
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The next issue is with regard to deduction u/s 80IB in respect of interest on fixed deposit.
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We have heard the ld. representative for the taxpayer and the ld. DR. Admittedly, the interest was received from fixed deposit. The source of interest is the fixed deposit and not that of the business. Therefore, it cannot be said that the interest income was derived from industrial undertaking or business of the tax payer. Therefore, the taxpayer is not eligible for deduction u/s 80IB of the Act in respect of interest received from fixed deposit.
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Now coming to the revenue's appeal, the only issue is with regard to disallowance of expenditure incurred by the taxpayer in replacing chamber assembly in the intermix machine.
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Shri Mathew Joseph, the ld. representative for the taxpayer submitted that the taxpayer is engaged in the business of manufacture of tread rubber. According to the ld. representative, in the course of its business activity, the taxpayer has replaced chamber assembly which is a part of intermix machine consists of motor, gear box, top cylinder, chamber assembly, hydraulic power back and motor...
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