The ACIT, (OSD)Range-8, Ahmedabad V. Soma Taxtiles & Industries Ltd., Ahmedabad

ITA 1240/AHD/2006

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9183 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2009
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 27-08-2009
• Assessment Year: 2002-2003
• Appeal Filed On: 16-05-2006
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJIV AGGARWAL
• Assessee Lawyers: M K PATEL
• Section: 10B; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI T.K. SHARMA, JUDICIAL MEMBER & SHRI N.S.SAINI, ACCOUNTANT MEMBER ITA NO. 1240/AHD/2006 ASSESSMENT YEAR: 2002-03 ACIT, (OSD), RANGE-8 V M/S SOMA TEXTILES & INDUSTR IES LTD, AHMEDABAD AHMEDABAD PAN NO./GIR NO. AAADC 0405R (APPELLANT) (RESPONDENT) APPELLANT BY : SH RAJIV AGGARWAL, CIT DR RESPONDENT BY : SH M.K. PATEL ORDER PER T.K.SHARMA, J.M. THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER DAT ED 16.2.2006 OF CIT(A)-XIV, AHMEDABAD FOR THE ASSESSMENT YEAR 2002- 03. 2. GROUND NO.1 RAISED IS AS UNDER:- THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO EXCLUDE THE INCOME OF BARAMATI UNIT TO BE SET OFF AGAINST THE LOSS OF OTHER UNIT ON THE GROUN D THAT THE INCOME FROM THE BARAMATI UNIT IS EXEMPT U/S 10B OF THE ACT IGNORING THE FACT THAT THE PROVISIONS OF SECTION10B OF THE ACT HAS BEEN AMENDED BY FINANCE ACT, 2001 W.E.F. 1.4.2002. 3. AT THE TIME OF HEARING, BOTH THE SIDES CONCEDED THAT INCOME OF BARAMATI UNIT IS EXEMPTED U/S 10B OF INCOME TAX ACT , 1961. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER COMPUTED T HE INCOME FROM THIS UNIT AT RS. 15.13.496/- AND ADJUSTED THE SAME AGAINST LOSS OF AHMEDABAD UNIT AMOUNTING TO RS. 2,61,59,622/-. IN THE IMPUGNED OR DER, LD CIT(A) DIRECTED TO 2 EXCLUDE THE INCOME OF BARAMAATI UNIT TO BE SET OFF AGAINST LOSS OF OTHER UNIT ON THE GROUND THAT THE INCOME FROM BARAMATI UNIT I S EXEMPT U/S 10B OF THE ACT IGNORING THE FACT THAT PROVISIONS OF SECTION 10 B OF THE ACT HAS BEEN AMENDED BY FINANCE ACT 2001 W.E.F. 1.4.2002. IN TH IS VIEW OF THE MATTER, THIS ISSUE IS RESTORED TO THE FILE OF THE LD CIT(A) WITH THE DIRECTION THAT HE SHOULD RE- ADJUDICATE THIS FINDING AFTER TAKING INTO CONSIDERA TION THE AMENDED PROVISIONS OF SECTION 10-B BY FINANCE ACT 2001 W.E.F. 1..4.200 2. WE, THEREFORE, RESTORE THIS ISSUE TO THE FILE OF THE LEARNED CIT(A) WHO WI LL MODIFY HIS DIRECTION KEEPING IN VIEW THE AMENDED PROVISIONS OF SECTION10B AS ADM ITTED BY BOTH SIDES. FOR STATISTICAL PURPOSES, THIS GROUND OF APPEAL IS TREA TED AS ALLOWED. 4. GROUND NO. 2 RAISED IS AS UNDER:- THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE ADDITION ON ACCOUNT OF DISALLOWANCES O UT OF TELEPHONE EXPENSES AMOUNTING TO RS. 1,23,543/- AND CAR EXPENSES AMOUNTING TO RS. 64,379/- . 5. IN THE ASSESSMENT ORDER THE ASSESSING OFFICER D ISALLOWED 1/10 TH OF THE TELEPHONE EXPENSES ON ACCOUNT OF PERSONAL USE. IN THE IMPUGNED ORDER, LEARNED CIT(A) DELETED THE SAME FOLLOWING THE JUDGE MENT OF SAYAJI IRON & ENGG CO V CIT (2002) 253 ITR 749 (GUJ). AT THE TIM E OF HEARING, LEARNED DR POINTED OUT THAT DISALLOWANCE MADE BY ASSESSING OFF ICER WAS FAIR AND REASONABLE AND LEARNED CIT(A) IS NOT JUSTIFIED IN D ELETING THE SAME. ON THE OTHER HAND, LEARNED COUNSEL OF THE ASSESSEE SUBMITT ED THAT THIS BEING A COMPANY, THERE CANNOT ANY PERSONAL USER OF TELEPHON E, THEREFORE, VIEW TAKEN BY THE LEARNED CIT(A) BE UPHELD. ADMITTEDLY, THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HONBLE GUJRAT HIGH COURT IN THE CASE OF 3 SAYAJI IRON & ENGG CO (SUPRA). WE, THEREFORE, DECL INE TO INTERFERE. THIS GROUND OF THE APPEAL IS REJECTED. IN THE RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 4-9-2009 SD/- SD/- (N.S.SAINI) (T.K.SHARMA) ACCOUNTNT MEMBER JUDICIAL MEMBER DATED: 04 SEPT 2009 RKK COPY FORWARDED TO :- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT (A). 4. THE CIT 5. DR 6. GUARD FILE BY ORDER TRUE COPY DY./ASSTT. REGISTRAR, ITAT, AHMEDABAD.