A.K. FILMS P.LTD, MUMBAI V. ASST CIT 11(1), MUMBAI

CO 276/MUM/2013

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 1946 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-01-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 27-11-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CO M A Y; SOMANATH S UKKALI ITA NO M
• Assessee Lawyers: ISHA SEKHRI
• Section: 142(1); 80IB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . . , ! '# , $ , % BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER / I.T.A. NO.5981/MUM/12 ( $ & '& / ASSESSMENT YEAR: 2009-10) ACIT 11(1) ROOM NO.439, AAYAKAR BHAVAN, M.K.MARG, MUMBAI - 400020 / VS. M/S. A. K. FILMS PVT. LTD. C-101, PURVI APARTMENTS, SUNDER VAN, OFF. LOKHANDWALA RD., ANDHERI(W), MUMBAI - 400058 CROSS OBJECTION NO. 276/MUM/2013(ARISING I.T.A. NO.5 981/MUM/12) ( $ & '& / ASSESSMENT YEAR: 2009-10) M/S. A. K. FILMS PVT. LTD. C-101, PURVI APARTMENTS, SUNDER VAN, OFF. LOKHANDWALA RD., ANDHERI(W), MUMBAI - 400058 / VS. ACIT 11(1) ROOM NO.439, AAYAKAR BHAVAN, M.K.MARG, MUMBAI - 400020 ./ ./ PAN/GIR NO. : AACCA4742Q ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 11.01.2015 !' /DATE OF PRONOUNCEMENT: 22.01.2016 ASSESSEE BY: MS. ISHA SEKHRI DEPARTMENT BY: SHRI SOMANATH S. UKKALI ITA NO.5981/M/12 & CO 276/M/13 A.Y. 2009-10 2 #$ / O R D E R PER AMARJIT SINGH, JM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 26.07.2012 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-3, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RE LEVANT TO THE ASSESSMENT YEAR 2009-10. THE ASSESSEE HAS ALSO FIL ED THE CROSS OBJECTION. THEREFORE, THESE CASES ARE BEING TAKEN U P TOGETHER AND ARE BEING DECIDED JOINTLY BY PASSING THE SINGLE ORDER B EING THE PARTIES ARE SAME AND MATTER OF CONTROVERSY IS ALSO THE SAME WHI CH CAN BE ADJUDICATED BY A SINGLE ORDER CONVENIENTLY. 2. THE ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2009-10 ON 30.09.2009 DECLARING TOTAL INCOME OF RS.2,91,66,917 /-. THEREAFTER, THE ASSESSEE COMPANY REVISED ITS RETURN ON 05.10.20 09 DECLARING INCOME OF RS.2,04,18,530/-. THE RETURN WAS REVISED TO SET OFF THE CARRY FORWARD LOSSES CORRECTLY. THE RETURN FILED B Y THE ASSESSEE WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT, 1961( IN SHORT THE ACT) AND TAKEN UP FOR SCRUTINY THROUGH CASS. SUBS EQUENTLY, NOTICE U/S. 143(2) DATED 24.08.2010 AND NOTICE U/S. 142(1) DATED 14.06.2011 WERE ISSUE AND DULY SERVED UPON THE ASSESSEE. AFTER RECEIPT OF NOTICES, SHRI ABHIRAJ RANAWAT, C.A. APPEARED AND DEFENDED TH E CASE OF THE ASSESSEE. THE ASSESSEE CLAIMED THE DEDUCTION U/S. 80IB OF THE ACT AMOUNTING TO RS.87,33,388/- UNDER THE HEAD CHAPTER VI-A DEDUCTIONS BUT THE ASSESSING OFFICER DECLINED THE SAME AND ITA NO.5981/M/12 & CO 276/M/13 A.Y. 2009-10 3 COMPLETED THE ASSESSMENT ACCORDINGLY. SUBSEQUENTLY , THE CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE AND DEDUCTION U/ S. 80IB WAS ALLOWED THEREFORE THE REVENUE HAS FILED THE APPEAL BEFORE US. HOWEVER, THE ASSESSEE DID NOT PRESS THE CROSS OBJEC TION. 3. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRES ENTATIVE OF THE PARTIES AND PERUSED THE RECORDS. THE CONTENTIO N OF THE REVENUE IS THAT THE LEARNED CIT(A) HAS WRONGLY ALLOWED THE DED UCTION OF RS.87,33,388/- MADE U/S. 80IB OF THE ACT. BEFORE P ROCEEDING FURTHER IT IS NECESSARY TO ADVERT THE FINDING OF CIT(A) ON RECORD:- I HAVE CONSIDERED THE FACTS AND MATERIAL ON RECORD. IT IS SEEN THAT THE ISSUE IN THE PRESENT C ASE IS COVERED BY ITS ITAT DECISION IN A.Y.2004-05 & 205-06 (ITA NO.1857/MUM/2009) DATED 22.10.2010 WHEREIN THE HONBLE ITAT FOLLOWING THE DECISION IN THE CASE OF DADA KONDKE OF BOMBAY HIGH COURT HELD THAT HE ASSESSEE IS AN INDUSTRIAL UNDERTAKING ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT. AS REGARDS THE OTHER CONDITION THAT THE ASSESSEE SHOUL D NOT USE THE OLD MACHINERY, THE TRIBUNAL OBSERVED THAT THE ASSESSEE IS CLAIMING BEFORE THEM THAT IT H AS ENTIRELY PURCHASED NEW MACHINERY IN THE EARLIER YEARS AND THE SAME IS USED FOR TV SERIALS DURING TH E RELEVANT PERIOD AND THERE IS NO TRANSFER OF OLD MACHINERY. HOWEVER, THE ASSESSEE HAS PURCHASED NEW MACHINERY DURING THE YEAR OR NOT WAS DIRECTED TO BE VERIFIED BY THE AO AND IF THE CONTENTION OF T HE ASSESSEE IS FOUND TO BE TRUE, THEN THE AO MAY BE ALLOWED DEDUCTION U/S 80IB OF THE ACT. IN THE LIGH T OF THESE FINDINGS OF THE HONBLE ITAT, I HOLD THAT THE APPELLANT IS ELIGIBLE FOR DEDUCTION U/S. 80IB O F THE ACT. HOWEVER, THE DEDUCTION IS SUBJECT TO VERIFICATION BY THE AO IN A.Y.2004-05 AND 05-06 WHERE THE APPELLANT HAS PURCHASED NEW PLANT AND ITA NO.5981/M/12 & CO 276/M/13 A.Y. 2009-10 4 MACHINERY IN THE EARLIER YEARS. WHEN THE BUSINESS WAS SET UP AND COMMENCED THE SAME HAS BEEN UTILIZED FOR PRODUCING THE TV SERIALS AS DIRECTED B Y THE HONBLE TRIBUNAL FOR A.Y. IN ITA NO. 220/MUM/2008 DATED 28.08.2009. THIS GROUND OF APPEAL IS THEREFORE ACCORDINGLY DISPOSED. IN THE RESULT, APPEAL IS TREATED AS ALLOWED. ON APPRAISAL OF ABOVE MENTIONED FINDINGS RECORDED B Y THE CIT(A) IT IS APPARENT ON RECORD THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY ON THE BASIS OF THE DECISION OF INCOME TAX APPELLATE TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NO.1857/ MUM/2009 DATED 22.10.2010 RELEVANT TO THE A.Y.2005-06 WHICH HAS AL SO BEEN DECIDED ON THE BASIS OF FINDINGS IN THE ASSESSEES OWN CASE IN ITA NO.220/M/2008 VIDE ITS ORDER DATED 28.08.2009. THE SAID ORDER PERUSED AND THE RELEVANT PARA OF THE SAID JUDGEMENT IS HEREBY REPRODUCED AS UNDER:- 7. HAVING HEARD BOTH THE PARTIES, WE FIND THAT THE OBJECTION OF THE A.O. THAT THE ASSESS EE IS NOT AN INDUSTRIAL UNDERTAKING, IS NOT TENABLE IN VIEW OF THE DECISION OF THE MUMBAI TRIBUNAL IN THE CASE OF FILM SHOPPE CITED SUPRA WHEREIN IT HAS BEEN HELD THAT PRODUCTION OF TV SERIALS AMOUNTS TO MANUFACTURING ACTIVITY. SIMILAR VIEW HAS ALSO BEEN EXPRESSED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF D.K.KONDKE CITED SUPRA. IN VIEW OF THE SAME, WE HOLD THAT THE ASSESSEE IS AN INDUSTRIAL UNDERTAKING ELIGIBLE FOR DEDUCTION U/S. 80IB OF THE ACT. 8. AS REGARDS THE OTHER CONDITION THAT THE ASSESSEE SHOULD NOT USE THE OLD MACHINERY, WE FIND THAT THE ASSESSEE IS CLAIMING BEFORE US THAT I T ITA NO.5981/M/12 & CO 276/M/13 A.Y. 2009-10 5 HAS PURCHASED ENTIRELY NEW MACHINERY IN THE EARLIER YEARS AND THE SAME IS USED FOR THE PRODUCTION OF TV SERIALS DURING THE RELEVANT PERIOD AND THERE IS NO TRANSFER OF ANY OLD MACHINERY. HOWEVER, THIS FACT HAS NOT BEEN CONSIDERED EITHER BY THE A.O. OR THE CIT(A). WE AGREE WITH THE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE THAT NEW MACHINERY IS NOT NECESSARY TO BE PURCHASED EVERY YEAR TO CLAIM DEDUCTION U/S. 80IB AND THE ONLY CONDITION STIPULATED IS THAT AN INDUSTRIAL UNDERTAKING SHOULD NOT BE SET UP BY THE TRANSFER OF OLD MACHINERY WHIC H IS ALREADY USED BY OTHERS. IN VIEW OF THE SAME, WE REMAND THIS ISSUE TO THE FILE OF THE A.O. WITH A DIRECTION TO VERIFY AS TO WHETHER THE ASSESSEE HAS PURCHASED NEW PLANT AND MACHINERY IN THE EARLIER YEARS WHEN THE BUSINESS WAS SET UP AND COMMENCED AND THE SAME HAS BEEN UTILIZED FOR PRODUCING THE TV SERIALS AND IF THE CONTENTION OF THE ASSESSEE IS FO UND TO BE TRUE, THEN THE A.O. MAY ALLOW DEDUCTION U/S. 80IB OF THE ACT. THIS GROUND IS ACCORDINGLY ALLOWE D FOR STATISTICAL PURPOSES. THE TRIBUNAL ALSO FOLLOWED THE ORDER PASSED BY THE BOMBAY HIGH COURT IN CASE OF DADA KONDKE. APPARENTLY, THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE JUDGEMENT MENTIONED ABOVE. WHEREAS THE REPRESENTATIVE OF THE DEPARTMENT NOWHERE PRODUCE AN Y MATERIAL TO DIFFER THE FINDING OF CIT(A). IN VIEW OF THE SAID FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE VIEW THAT THE CIT(A) HAS PASSED THE ORDER DATED 27.12.2011 CORRECTLY AND JUD ICIOUSLY WHICH DOES NOT REQUIRED TO BE INTERFERED WITH AT THE APPE LLATE STAGE. THEREFORE, IN VIEW OF THE REASONS RECORDED ABOVE TH E APPEAL OF THE REVENUE IS HEREBY DISMISSED. SO FAR AS THE OBJECTI ON RAISED BY THE ITA NO.5981/M/12 & CO 276/M/13 A.Y. 2009-10 6 ASSESSEE IS CONCERNED THE REPRESENTATIVE OF THE ASS ESSEE DID NOT PRESS THE OBJECTION RAISED BY HIM. THEREFORE, THE CROSS OBJECTION OF THE ASSESSEE IS ALSO HEREBY DISMISSED BEING NOT PRESSED . 3. ACCORDINGLY THE APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE ARE HEREBY DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JANUARY , 2016. SD/- SD/- (B.R.BASKARAN) (AMARJIT SINGH) # / ACCOUNTANT MEMBER %& # /JUDICIAL MEMBER ' ( MUMBAI; )# DATED : 22 ND JANUARY, 2016 MP MP MP MP ) * +$!', -,'! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- 4. * / CIT 5. -./ &&01 , 01' , ' ( / DR, ITAT, MUMBAI 6. /34 5 / GUARD FILE. ) / BY ORDER, - & //TRUE COPY// ./# (DY./ASSTT. REGISTRAR) , ' ( / ITAT, MUMBAI