M/s. Deepa Panels Pvt. Ltd., CHENNAI V. ITO, CHENNAI

ITA 109/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90436 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 13-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHAL
• Assessee Lawyers: S SRIDHAR
• Section: 143(3); 10B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . , ! ' , # $% & [BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER] ./ I.T.A.NOS.2219, 2220 & 2221/MDS/2013 / ASSESSMENT YEARS : 2005-06, 2007-08 & 2008-09 THE ASSTT. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE I(4) CHENNAI VS. M/S DEEPA PANELS PVT. LTD NO.184/3C,METTUPALAYAM- PARIVAKKAM ROAD METTUPALAYAM CHENNAI 600 077 [PAN AACCD 2054 L ] ( '( / APPELLANT) ( ')'( /RESPONDENT) ./ I.T.A.NOS.108, 109 & 110/MDS/2014 / ASSESSMENT YEARS : 2005-06, 2007-08 & 2008-09 M/S DEEPA PANELS PVT. LTD NO.184/3C,METTUPALAYAM- PARIVAKKAM ROAD METTUPALAYAM CHENNAI 600 077 VS. THE INCOME TAX OFFICER / ASSTT. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE I(4) CHENNAI ( '( / APPELLANT) ( ')'( /RESPONDENT) DEPARTMENT BY : DR. B. NISCHAL, JCIT ASSESSEE BY : SHRI S. SRIDHAR, ADVOCATE / DATE OF HEARING : 27-05-2015 / DATE OF PRONOUNCEMENT : -05-2015 ITA NOS.2219 TO 2221/13 108 TO 110/14 :- 2 -: * / O R D E R PER BENCH: THESE ARE SIX APPEALS UNDER CONSIDERATION. THESE CROSS APPEALS FILED BY THE REVENUE AND THE ASSESSEE ARE AGAINST SEPARATE ORDERS OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-I , CHENNAI, ALL DATED 23.10.2013, FOR THE ASSESSMENT YEARS 2005-06, 2007-08 AND 2008-09. THE LD. COUNSEL FOR THE ASSESSEE FOR THE ASSESSEE SUBMITTED THAT THE APPEAL FOR ASSESSMENT YEAR 2006-07 IS STIL L IN THE PROCESS OF ADJUDICATION BEFORE THE FIRST APPELLATE AUTHORITY. CONSIDERING THE COMMONALITY OF THE ISSUE, ALL THESE APPEALS WERE CL UBBED FOR ADJUDICATION AND HEARD TOGETHER. FOR THE SAKE OF C ONVENIENCE, THE SAME ARE BEING DISPOSED OF BY THIS COMMON ORDER. I. I.T.A.NO.2219/MDS/2013 & I.T.A.NO.108/MDS/2014 A.Y 2005-06 2. BEFORE US, AT THE OUTSET, THE LD. COUNSEL FOR THE A SSESSEE BROUGHT OUR ATTENTION TO THE GROUNDS OF APPEAL OF T HE REVENUE AND SUBMITTED THAT THE ISSUE RELATES TO THE INITIAL AS SESSMENT YEAR WAS DISPUTED BY THE ASSESSING OFFICER. IT IS THE CLAIM OF THE ASSESSEE THAT ASSESSMENT YEAR 2002-03 IS THE INITIAL ASSESSMENT Y EAR FOR CLAIMING DEDUCTION U/S 10B OF THE ACT. CONSEQUENTLY, ASSES SMENT YEAR 2005- 06 CONSTITUTES THE FOURTH YEAR OF THE CLAIM OF DEDU CTION U/S 10B. PER CONTRA, THE ASSESSING OFFICER WAS OF THE OPINION TH AT ASSESSMENT YEAR 2005-06 IS THE NINTH YEAR OF CLAIM OF DEDUCTION. IN THE FIRST APPELLATE ITA NOS.2219 TO 2221/13 108 TO 110/14 :- 3 -: PROCEEDINGS, THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. PARA 4 OF THE CIT(A)S ORDER IS RELEVANT IN THIS REGARD. DURING THE FIRST APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED THAT SIMILAR ISSUE CAME UP FOR ADJUDICATION IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2002-03 AND THE TRIBUNAL IN I.T.A.NO. 676/COCH/2010 DATED 1.6.2012 REMANDED THE ISSUE FOR RE-CONSIDERATION BY THE ASSE SSING OFFICER. THE ASSESSEE FILED APPEAL BEFORE THE COCHIN BENCH OF TH E TRIBUNAL AT THE RELEVANT POINT OF TIME. IN THE REMAND PROCEEDINGS, THE ASSESSING OFFICER COMPLIED WITH THE DIRECTIONS OF THE TRIBUNA L AND PASSED ORDER U/S 143(3) R.W.S 254 OF THE ACT WHEREIN THE ASSESSI NG OFFICER HELD THAT ASSESSMENT YEAR 2002-03 CONSTITUTE THE FIRST YEAR O F PRODUCTION WITH REFERENCE TO VARADHARAJAPURAM EOU UNIT WHICH IS THE SUBJECT MATTER OF DISPUTE SO FAR AS CLAIM OF DEDUCTION U/S 10B IS CONCERNED. PARA 5 OF THE SAID ASSESSMENT ORDER IS RELEVANT AND THE SA ME READS AS UNDER: 5. THE MATERIAL/DOCUMENTAL EVIDENCES PRODUCED BY T HE ASSESSEE WITH RESPECT TO THE NEW BUSINESS UNDERTAKI NG SET UP AT VARADARAJAPURAM, POONAMALLEE, CHENNAI, ARE EXAMIN ED. AFTER VERIFICATION OF THE SAME IN VIEW OF THE DIREC TIONS GIVEN BY THE HON'BLE ITAT IN THE ORDER DATED 01/06/2012 AND IN THE LIGHT OF TH EORDER OF THE CIT(APPEALS)-I, CHENN AI, DATED 23/10/2013, IN I.T.A.NO. 570/07-08/A-I, THE ASSESSEES CLAIM OF EXEMPTION U/S 10B IS ALLOWED TREATING THE AS SESSMENT YEAR 2002-03 AS THE FIRST YEAR OF PRODUCTION WITH RESPEC T TO THE VARADARAJAPURAM EOU UNIT. THE ASSESSMENT ORDER U/S 143(3) DATED 23/3/2004 IS MODIFIED TO THIS EXTENT. 3. THUS, IT IS THE SUMMARIZED ARGUMENT OF THE LD. COUN SEL FOR THE ASSESSEE THAT IT IS A DECIDED ISSUE AT THE LEV EL OF THE TRIBUNAL THAT ITA NOS.2219 TO 2221/13 108 TO 110/14 :- 4 -: ASSESSMENT YEAR 2002-03 IS THE FIRST YEAR OF PRODUC TION AND CONSEQUENTLY, THE PRESENT ASSESSMENT YEAR 2005-06 C ONSTITUTES FOURTH YEAR OF CLAIM OF DEDUCTION U/S 10B OF THE ACT. 4. AFTER HEARING THE LD. DR FOR THE REVENUE AND PERUSI NG THE ORDER OF THE ASSESSING OFFICER GIVING EFFECT TO THE DIRECTIONS OF THE TRIBUNAL, COCHIN BENCH, WE ARE OF THE OPINION THAT THE CIT(A) HAS RIGHTLY ADJUDICATED THIS ISSUE IN FAVOUR OF THE AS SESSEE AND THE SAME IS FAIR AND REASONABLE. ACCORDINGLY, THE GROUNDS R AISED BY THE REVENUE ARE DISMISSED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. 6. IN REGARD TO THE CROSS APPEAL OF THE ASSESSEE, THE LD. COUNSEL SUBMITTED THAT THE ONLY ISSUED INVOLVED IS APPLICATION OF PROVISIONS OF SECTION 40(A)(IA) OF THE ACT IN RESPE CT OF THE AMOUNTS PAID OR PAYABLE. IN THE IMPUGNED ORDER, THE CIT( A) HELD THAT THERE IS NO IMPACT OF DISALLOWANCE U/S 40(A)(IA) OF THE ACT ON THE TAXABILITY CONSIDERING THE AVAILABILITY OF DEDUCTION U/S 10B OF THE ACT IN VIEW OF THE TAX HOLIDAY. THE LD. COUNSEL FURTHER SUBMITTED THAT THE CIT(A) HAS DISMISSED THIS ISSUE HOLDING THE SAID DISALLOWANCE U/S 40(A)(IA) OF THE ACT REMAINS ACADEMIC. IT IS THE SUBMISSION OF THE LD. COUNSEL BEFORE US THAT IN CASE THE REVENUES APPEAL IS DISMISSED, THE GROUNDS RAISED BY THE ASSESSEE IN THE CROSS APPEAL MAY ALSO BE DI SMISSED CONSIDERING ITA NOS.2219 TO 2221/13 108 TO 110/14 :- 5 -: FAVOURABLE DECISION OF THE CIT(A) ON THE CLAIM OF D EDUCTION VIDE PARA 5.2.3 OF HIS ORDER. 7. ON HEARING BOTH THE PARTIES ON THE ISSUE OF APPLIC ABILITY OF PROVISIONS OF 40(A)(IA) OF THE ACT AND THE TAXABILI TY OF THE SAID ADDITION CONSIDERING THE TAX HOLIDAY U/S 10B OF THE ACT, WE ARE OF THE OPINION THAT ADJUDICATION OF THIS ISSUE RAISED IN THE ASSE SSEES APPEAL BECOMES MERELY AN ACADEMIC EXERCISE. THEREFORE, THE GROUND S RAISED ARE DISMISSED AS BEING ACADEMIC. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED . II. I.T.A.NO.2220/MDS/2013 & I.T.A.NO.109/MDS/2014 A.Y 2007-08 9. AT THE OUTSET, THE LD. COUNSEL BROUGHT OUR ATTENTIO N TO THE GROUNDS OF THE REVENUES APPEAL AND SUBMITTED THAT THE ISSUE RAISED IN THE APPEAL IS LINKED TO THE ISSUE OF INITIAL ASSES SMENT YEAR FOR THE PURPOSE OF CLAIMING DEDUCTION U/S 10B OF THE ACT. THE LD. COUNSEL SUMMARIZED BY STATING THAT THE ASSESSEE WAS OF THE OPINION THAT THE ASSESSMENT YEAR 2007-08 CONSTITUTES SIXTH YEAR OF C LAIM OF DEDUCTION WHICH WAS NOT ACCEPTED BY THE REVENUE. BRINGING OU R ATTENTION TO THE ORDER OF THE ASSESSING OFFICER GIVING EFFECT TO THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2002-03 (SUPRA), WE FIND THAT I T IS A CONCLUDED ISSUE THAT ASSESSMENT YEAR 2002-03 IS THE FIRST YEA R OF PRODUCTION FOR CLAIMING DEDUCTION U/S 10B OF THE ACT. CONSIDERIN G THE SAME, THE ITA NOS.2219 TO 2221/13 108 TO 110/14 :- 6 -: CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE AS SEEN FROM THE CONTENTS OF PARA 4 OF HIS ORDER. 10. AFTER HEARING BOTH THE PARTIES AND PERUSING THE ORD ER OF THE CIT(A), ORDER OF ASSESSMENT GIVING EFFECT TO THE DI RECTIONS OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2002-03, WE FIND T HAT THE CIT(A)S ORDER IS FAIR AND REASONABLE AND DOES NOT CALL FOR ANY INTERFERENCE ON THIS ISSUE. THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 11. WITH REFERENCE TO THE CROSS APPEAL OF THE ASSESSEE ON THE ISSUE OF APPLICABILITY OF SECTION 40(A)(IA) OF THE ACT QUA THE CLAIM OF DEDUCTION U/S 10B, IT IS THE SUBMISSION OF THE AS SESSEE THAT THE ADJUDICATION OF THE ISSUE BECOMES AN ACADEMIC EXERC ISE IF THE APPEAL OF THE REVENUE IS DISMISSED BRINGING FINALITY ON TH E ALLOWABILITY OF DEDUCTION U/S 10B AND ALSO ON THE ISSUE OF FIRST Y EAR OF PRODUCTION FOR ELIGIBILITY OF DEDUCTION U/S 10B. CONSIDERING OUR DECISION ON THIS ISSUE IN REVENUES APPEAL I.T.A.NO.2219/MDS/2013 IN THE P RECEDING PARAGRAPHS OF THIS ORDER, THE GROUNDS RAISED BY THE ASSESSEE HAVE TO BE DISMISSED AS AN ACADEMIC EXERCISE. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED AS ACADEMIC. III. I.T.A.NO.2221/MDS/2013 AND I.T.A.NO.110/MDS/2014-A .Y 2008-09 ITA NOS.2219 TO 2221/13 108 TO 110/14 :- 7 -: 12. AT THE OUTSET, THE LD. COUNSEL BROUGHT OUR ATTENTI ON TO THE GROUNDS OF THE REVENUES APPEAL AND SUBMITTED THAT THE ISSUE RAISED IN THE APPEAL IS LINKED TO THE ISSUE OF INITIAL ASSES SMENT YEAR FOR THE PURPOSE OF CLAIMING DEDUCTION U/S 10B OF THE ACT. THE LD. COUNSEL SUMMARIZED BY STATING THAT THE ASSESSEE WAS OF THE OPINION THAT THE ASSESSMENT YEAR 2008-09 CONSTITUTES SEVENTH YEAR OF CLAIM OF DEDUCTION WHICH WAS NOT ACCEPTED BY THE REVENUE. B RINGING OUR ATTENTION TO THE ORDER OF THE ASSESSING OFFICER GIV ING EFFECT TO THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2002-03 ( SUPRA), WE FIND THAT IT IS A CONCLUDED ISSUE THAT ASSESSMENT YEAR 2 002-03 IS THE FIRST YEAR OF PRODUCTION FOR CLAIMING DEDUCTION U/S 10B O F THE ACT. CONSIDERING THE SAME, THE CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE AS SEEN FROM THE CONTENTS OF PARA 4 OF HIS ORDER. 13. AFTER HEARING BOTH THE PARTIES AND PERUSING THE ORD ER OF THE CIT(A), ORDER OF ASSESSMENT GIVING EFFECT TO THE DI RECTIONS OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2002-03, WE FIND T HAT THE CIT(A)S ORDER IS FAIR AND REASONABLE AND DOES NOT CALL FOR ANY INTERFERENCE ON THIS ISSUE. THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 14. WITH REFERENCE TO THE CROSS APPEAL OF THE ASSESSEE ON THE ISSUE OF APPLICABILITY OF SECTION 40(A)(IA) OF THE ACT QUA THE CLAIM OF DEDUCTION U/S 10B, IT IS THE SUBMISSION OF THE ASS ESSEE THAT THE ITA NOS.2219 TO 2221/13 108 TO 110/14 :- 8 -: ADJUDICATION OF THE ISSUE BECOMES AN ACADEMIC EXERC ISE IF THE APPEAL OF THE REVENUE IS DISMISSED BRINGING FINALITY ON TH E ALLOWABILITY OF DEDUCTION U/S 10B AND ALSO ON THE ISSUE OF FIRST Y EAR OF PRODUCTION FOR ELIGIBILITY OF DEDUCTION U/S 10B. CONSIDERING OUR DECISION ON THIS ISSUE IN REVENUES APPEAL I.T.A.NO.2219/MDS/2013 IN THE P RECEDING PARAGRAPHS OF THIS ORDER, THE GROUNDS RAISED BY THE ASSESSEE HAVE TO BE DISMISSED AS AN ACADEMIC EXERCISE. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED AS ACADEMIC. 15. IN THE RESULT, ALL THE APPEALS OF THE REVENUE AND ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH OF MAY, 2015, AT CHENNAI. SD/- SD/- ( ! ' ) (CHALLA NAGENDRA PRASAD) # / JUDICIAL MEMBER ( . ) (D. KARUNAKARA RAO) / ACCOUNTANT MEMBER / CHENNAI / DATED: 29 TH MAY, 2015 RD ! ' #$ %$ / COPY TO: 1 . &' / APPELLANT 4. ( / CIT 2. ')&' / RESPONDENT 5. $*+ ' , / DR 3. ( () / CIT(A) 6. +/ 0 / GF