DCIT, Bangalore V. M/s Polyflex (India) Pvt. Ltd., Bangalore

ITA 1145/BANG/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5415 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-04-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 03-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V S SREELEKHA
• Assessee Lawyers: S NITYA
• Keywords: Reopening of assessment
• Section: 260A; 80IB; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE B BENCH, BANGALORE BEFORE SHRI GEORGE GEORGE, K. JM AND SHRI A. MOHAN ALANKAMONY, AM ITA NOS.1145 & 1146(BANG.)/2009 (ASSESSMENT YEARS : 2000-01 & 2001-02) THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-12(2), BANGALORE. APPELLANT VS M/S POLYFLEX (INDIA) PVT.LTD., NO.116 & 117, BOMMASANDRA IND. AREA, ANEKAL TALUK, BANGALORE-562 158 RESPONDENT REVENUE BY : SMT. V.S.SREELEKHA, DR ASSESSEE BY : SMT. S.NITYA, ADVOCATE O R D E R PER SHRI GEORGE GEORGE, K. JM : THESE APPEALS OF THE REVENUE ARE DIRECTED AGAINST THE CONSOLIDATED ORDER OF THE CIT(A) DATED 27-12-2009, IN RELATION TO ASSESSMENT YEARS 2000-01 AND 2001-02 RESPECTIVELY. SINCE COMMON ISSUES ARE INVOLVED IN BOTH THESE APPEALS, T HEY WERE HEARD TOGETHER AND DISPOSED OF BY A COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. GROUNDS RAISED IN THIS APP EAL ARE IDENTICAL AND THE EFFECTIVE GROUND READS AS UNDER; ITA NOS.1145 & 1146(B)/09 2 THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80IB RELYING ON THE DECISION OF THE ITAT, BANGALORE BENCH A BANGALORE IN THE ASSESSEES OWN CASE FOR THE AY: 2002-03 & 2003-04 WITHOUT APPRECIATING THE FACT THAT THE DECISION OF THE ITAT, BANGALORE FOR THOSE ASSESSMENT YEARS HAS NOT BECOME FINAL AND APPEAL U/S 260A HAS BEEN FILED BY THE REVENUE BEFORE THE HONBLE HIGH COURT 2. FACTS IN BRIEF AS FOLLOWS. THE ASSESSEE IS A C OMPANY, ENGAGED IN THE MANUFACTURING OF POLYURETHANE FOAM U SED IN THE AUTOMOBILE INDUSTRY. THE ASSESSEE HAD CLAIMED DEDU CTION U/S 80IA ON THE PROFITS DERIVED FROM SUCH MANUFACTURING ACTIVITY. FOR THE ASSESSMENT YEAR 2000-01, ASSESSEE CLAIMED DEDUC TION U/S 80IA AMOUNTING TO RS.24,85,763/- AND FOR THE ASSESS MENT YEAR 2001-02 CLAIMED DEDUCTION U/S 80IA AMOUNTING TO RS.20,80,347/-. THIS CLAIM OF DEDUCTION U/S 80IA W AS ALLOWED IN THE ASSESSMENTS ORIGINALLY COMPLETED. SUBSEQUENTLY , THE ASSESSMENTS WERE RE-OPENED BY ISSUING NOTICE U/S 14 8 OF THE IT ACT, FOR THE REASON THAT MANUFACTURE OF POLYURETHAN E FOAM IS COVERED BY THE ELEVENTH SCHEDULE IN ITEM NO.25 AND HENCE WAS NOT ENTITLED TO DEDUCTION U/S 80IA OF THE ACT. 3. THE ASSESSEE OBJECTED TO THE RE-OPENING OF ASSES SMENT BY CONTENDING THAT THE ASSESSMENT WAS RE-OPENED AFTER A PERIOD OF ITA NOS.1145 & 1146(B)/09 3 FOUR YEARS AND CONTRARY TO THE MANDATE MENTIONED IN PROVISO TO SECTION 147. ON MERITS, THE ASSESSEE SUBMITTED THA T THE ISSUE HAS BEEN DEALT BY THE TRIBUNAL IN THE ASSESSEES OWN CA SE IN ITA NOS.872 & 994(B)/2006 FOR THE ASSESSMENT YEARS 2002 -03 & 2003- 04 AND THE MATTER WAS DECIDED IN FAVOUR OF ASSESSEE . THE ASSESSING OFFICER HOWEVER, REJECTED VARIOUS OBJECTI ONS RAISED BY THE ASSESSEE AND COMPLETED THE ASSESSMENT FOR BOTH THE ASSESSMENT YEARS ON 24-12-2007, DENYING THE ASSESSEE THE BENEF IT OF DEDUCTION CLAIMED U/S 80IA OF THE ACT. 4. FOR REDRESSAL THE MATTER WAS TAKEN UP BEFORE THE FIRST APPELLATE AUTHORITY AND CONTENTIONS WERE RAISED WIT H REGARD TO RE- OPENING OF THE ASSESSMENT AS WELL AS ON MERITS. THE CIT(A)DISMISSED THE ASSESSEES CLAIM WITH REGARD TO RE-OPENING OF ASSESSMENT AND ITS VALIDITY. HOWEVER, ON MERITS, T HE CIT(A) FOLLOWED THE ORDER OF TRIBUNAL IN ASSESSEES OWN CA SE CITED SUPRA AND DECIDED THE MATTER IN FAVOUR OF ASSESSEE. 4.1 THE REVENUE BEING AGGRIEVED IS IN APPEAL BEFORE US. THE LEARNED DR STRONGLY RELIED ON THE FINDINGS OF THE A SSESSING OFFICER. WHEREAS THE LEARNED AR REITERATED THE SUBMISSION MA DE BEFORE THE AUTHORITIES BELOW AND SUPPORTED THE FINDING OF THE CIT(A). ITA NOS.1145 & 1146(B)/09 4 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE MATTER HAS BEEN CONSIDERED IN ASSESSEES OWN CASE IN THE ORDER OF THE TRIBUNAL CI TED SUPRA. THE RELEVANT PORTION OF THE FINDINGS OF THE TRIBUNAL IS REPRODUCED BELOW; IN THE INSTANT CASE, THE ITEM MENTIONED IS LATEX- FOAM SPONGE AND POLYURETHANE FOAM. IF THE LEGISLATURE INTENDED TO INCLUDE ALL ITEMS CONTAINING POLYURETHANE FOAM THEN IT COULD HAVE BEEN TERMED AS SUCH. THE CALCUTTA HIGH COURT IN THE CASE OF INDIAN ALUMINUM CO., LTD VS CIT, 140 ITR 114 DISALLOWED THE DEDUCTION ON ACCOUNT OF END PRODUCT THOUGH END PRODUCT WAS MADE FROM AN ITEM MENTIONED IN THE LIST OF PRIORITY INDUSTRY. THE UNDERTAKING IN THIS CASE IS EARNING PROFIT FROM THE MANUFACTURING OF AUTOMOBILES SEATS AND NOT POLYURETHANE FOAM. HENCE, FOR THE PURPOSES OF SCHEDULE XI, IT IS HELD THAT THE ASSESSEE IS NOT ENGAGED IN THE BUSINESS OF MANUFACTURING OF POLYURETHANE FOAM. HENCE, THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80IB FOR BOTH THE YEARS. THE FACTS INVOLVED IN THE INSTANCE CASES ARE IDENT ICAL TO THE FACTS CONCERNING ASSESSMENT YEARS 2002-03 AND 2003- 04 (THE ASSESSMENT YEARS CONCERNED IN TRIBUNAL ORDER IN ITA NOS.872 AND ITA NOS.1145 & 1146(B)/09 5 994(B)/2006). THEREFORE, WE ARE INCLINED TO FOLLOW THE CO-ORDINATE BENCH DECISION OF THE TRIBUNAL IN ASSESSEES OWN CA SE CITED SUPRA. HENCE, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) IN DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE. 6. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THE 12-04-2010. (A. MOHAN ALANKAMONY) (GEORGE GEORGE.K ) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: BANGALORE DATED: 12-0-4-2010. AM* COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3. CIT(A) 4. CIT 5. DR 6. GF(BLORE) 7. GF(DELHI) BY ORDER AR, ITAT, BANGALORE