KGK JEWELLERY P.LTD, MUMBAI V. ITO WD 8(2)(2), MUMBAI

CO 77/MUM/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7704 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 12-09-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2003-2004
• Appeal Filed On: 22-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 143(3); 148

Judgement Text

ITA NOS.5127 & 5128 OF 2011 AND CO 77 OF 2012 KGK J EWELLERY PVT. LTD MUMBAI PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH, MUMBAI BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NOS.5127 & 5128 /MUM/2011 (ASSESSMENT YEAR: 2003-04) INCOME TAX OFFICER 8(2)(2) ROOM NO.212/216A, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 VS. K.G.K. JEWELLERY PVT. LTD., G- 17 GEM JEWELLERY COMPLEX-II SEEPZ, ANDHERI (EAST), MUMBAI 400096 PAN: AAACK 4612 M (APPELLANT) (RESPONDENT) C.O. NO.77/MUM/2012 (ARISING OUT OF ITA NO. 5128/MUM/2011) (ASSESSMENT YEAR 2003-04) K.G.K. JEWELLERY PVT. LTD., G-17 GEM JEWELLERY COMPLEX-II SEEPZ, ANDHERI (EAST), MUMBAI 400096 PAN: AAACK 4612 M VS. INCOME TAX OFFICER 8(2)(2) ROOM NO.212/216A, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY: MS. NEERAJA PRADHAN, DR ASSESSEE BY: SHRI SUNIL HIRAWAT DATE OF HEARING: 22/08/2012 DATE OF PRONOUNCEMENT: 12/09/2012 O R D E R PER B. RAMAKOTAIAH, A.M. THE APPEALS ARE BY THE REVENUE AGAINST THE ORDERS O F THE CIT (A)-17 MUMBAI, DATED 15/03/2011. THESE TWO APPEALS ARISE OUT OF THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) DA TED 28.02.2006 AND RE-ASSESSMENT ORDER UNDER SECTION 14 3(3) R.W.SEC 147 DATED 31/12/2008. THE ISSUE IN THESE APPEALS IS WITH REFERENCE TO THE CLAIM OF EXEMPTION UNDER SECTION 10A. THE RE VENUE HAS RAISED SIMILAR GROUNDS IN BOTH THE PROCEEDINGS AS T HE ISSUES ARE ITA NOS.5127 & 5128 OF 2011 AND CO 77 OF 2012 KGK J EWELLERY PVT. LTD MUMBAI PAGE 2 OF 4 SAME. THE CIT (A) FOLLOWING THE DECISION OF THE ITA T IN ASSESSMENT YEAR 2004-05 IN ASSESSEES OWN CASE DIRECTED AO TO FOLLOW THE ITAT ORDER ON IDENTICAL FACTS AND RECOMPUTE THE DEDUCTIO N UNDER SECTION 10A ACCORDINGLY. THE REVENUE HAS RAISED THE GROUNDS SINCE THE ORDER WHICH WAS FOLLOWED BY THE ITAT HAVE NOT BEEN ACCEPTED BY THE DEPARTMENT. FOR THE SAKE OF RECORD, THE GROUNDS RAI SED IN ITA NO.5127/MUM/2011 ARE EXTRACTED BELOW: 1. 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE AO TO RECOMPUTE THE DEDUCTION U/S 10A AS PER THE DIRECTIONS OF THE HON'BLE ITAT FOR AY 2004-05 IN ORDER NO.562/MUM/200B DATED 15.2.2011, WITHOUT APPRECIATING THAT THE HON'BLE IT A T IN A Y 2004-05 HAS RELIED ON THE RATIO OF ITS DECISION IN THE CASE OF T-TWO INTERNATIONAL PVT. LTD. IN ITA NO. 6203/MUM 2004 DATED 17.10.2008 WHICH HAS NOT BEEN ACCEPTED BY THE DEPARTMENT'. 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN HOLDING THAT JOB CHARGE S OF RS.33,90,209/- IS ELIGIBLE FOR DEDUCTION U/S 10A OF THE ACT, WITHOUT APPRECIATING THAT THE ISSUE OF ALLOWABILITY OF DEDUCTION U/S 10A IN RESPECT OF JOB CHARGES HAS BEE N RESTORED TO THE AO FOR RE-CONSIDERATION AND NO RELI EF HAS BEEN ALLOWED BY THE ITA T IN THIS RESPECT IN THE AS SESSEE'S CASE IN A Y 2004-05, AS APPARENT FROM PARA 7 OF ITA T'S ORDER DATED 15.2.2011'. 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN HOLDING THAT INTEREST O F RS.B2,792/- IS ELIGIBLE FOR DEDUCTION U/S 10A OF THE ACT, WITHOUT APPRECIATING THAT THE ASSESSEE HAS NOT CONT ESTED THIS DISALLOWANCE BEFORE THE HON'BLE ITAT IN ITS OW N CASE IN AY 2004-05'. 4. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DELETING INTEREST LEV IED U/S 2340 OF THE ACT (RELYING ON THE SPECIAL BENCH DECIS ION OF THE HON'BLE DELHI ITAT IN THE CASE OF EKTA PROMOTER S LTD.(305 ITR 1), WITHOUT APPRECIATING THAT THE DEPA RTMENT HAS NOT ACCEPTED THE ABOVE CITED JUDGMENT'. 5. THE TAX EFFECT OF THE IMPUGNED ISSUE IN THIS YEAR I S RS.1, 13,611/-. HOWEVER, THE SAME ISSUE OF DEDUCTION U/S 10A HAS BEEN DECIDED BY THE CIT(A) VIDE ORDER OF EVEN D ATE I.E 15.3.2011 IN RESPECT OF ASSESSMENT ORDER DATED 31.12.200B PASSED U/S 147 R.W.S 143(3) OF THE ACT, FOR THE SAME ASSESSMENT YEAR, WHEREIN THE TAX EFFECT IS ITA NOS.5127 & 5128 OF 2011 AND CO 77 OF 2012 KGK J EWELLERY PVT. LTD MUMBAI PAGE 3 OF 4 ` 22,14,0001-. IN CBDT'S INSTRUCTION NO.3 OF 2011 DAT ED 9.2.2011, IT HAS BEEN STIPULATED THAT 'IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTH ORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR, APPEA L SHALL BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YE ARS EVEN IF THE 'TAX EFFECT' IS LESS THAN THE PRESCRIBED MON ETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DECIDED TO F ILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH 'TAX EFFECT' EXCEED S THE MONETARY LIMIT PRESCRIBED'. ACCORDINGLY THE PRESENT APPEAL IS BEING FILED. 2. ASSESSEE RAISED THE CROSS OBJECTION WITH REFERENCE TO THE PROCEEDINGS INITIATED UNDER SECTION 148 WHICH WAS N OT PRESSED AT THE TIME OF HEARING. 3. AT THE OUTSET THE LEARNED COUNSEL SUBMITTED THAT TH E CIT (A) SIMPLY FOLLOWED THE ORDER OF ITAT FOR THE ASSESSMEN T YEAR 2004-05 IN DIRECTING AO TO COMPUTE ACCORDINGLY AND AO IN TH E CONSEQUENTIAL ORDER DATED 25/06/2012 FOR THE ASSESSMENT YEAR 2003 -04 HAS FOLLOWED THE ORDER GIVING EFFECT IN AY 2004-05 DATE D 21/11/2011 IN WHICH THE JOB WORK WAS TREATED AS INCOME FROM OTHER COURSES AND BANK INTEREST WAS ALSO TREATED AS INCOME FROM OTHER SOURCES. THEREFORE, THERE IS NO NEED FOR THE REVENUE TO CONT EST THE ISSUES WHICH ARE HELD IN FAVOUR OF THE REVENUE IN THE CONS EQUENTIAL PROCEEDINGS. 4. THE LEARNED DR HOWEVER, ACCEPTED THE FACTUAL POSITI ON AS SUCH. 5. SINCE AO WHILE GIVING EFFECT TO THE ITAT ORDER IN A SSESSMENT YEAR 2004-05 HAS TREATED THE BANK INTEREST AND JOB WORK RECEIPTS AS INCOME FROM OTHER SOURCES NOT PERTAINING TO THE UNI T ON WHICH DEDUCTION UNDER SECTION 10A WAS CLAIMED, SIMILAR AC TION WAS TAKEN IN ASSESSMENT YEAR 2003-04 ALSO THEREBY RESTRICTING THE EXEMPTION UNDER SECTION 10A ON THE INCOMES OTHER THAN BANK IN TEREST, JOB WORK CHARGES ETC., CONTESTED IN THE ABOVE APPEALS. SINCE THE ORDER OF AO IS IN FAVOUR OF THE REVENUE AND AGAINST ASSESSEE CONSEQUENT TO THE DIRECTIONS OF THE CIT (A), THESE TWO APPEALS PR EFERRED BY THE ITA NOS.5127 & 5128 OF 2011 AND CO 77 OF 2012 KGK J EWELLERY PVT. LTD MUMBAI PAGE 4 OF 4 REVENUE ARE INFRUCTUOUS AS NO GRIEVANCE WAS CAUSED TO REVENUE BY THE ORDER OF CIT(A). ACCORDINGLY, THESE ARE DISMISS ED. 6. IN THE RESULT BOTH THE REVENUE APPEALS AND THE CROS S OBJECTION FILED BY ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH SEPTEMBER, 2012. SD/- SD/- (B.R. MITTAL) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 12 TH SEPTEMBER, 2012. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, A BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI