Assistant Commissioner of Income-tax, Circle - 6, Pune V. Suttati Enterprises Pvt.Ltd, Pune

ITA 132/PUN/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8635 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 12-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N ASHOK BABU
• Section: 80IA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.132/PUN/2018 / ASSESSMENT YEAR : 2014-15 ACIT, CIRCLE-6, PUNE. ....... / APPELLANT / V/S. SUTTATI ENTERPRISES PVT. LTD., 43, SUTTATI, HADAPSAR INDUSTRIAL ESTATE, PUNE. PAN : AACCS4191H / RESPONDENT REVENUE BY : SHRI N. ASHOK BABU ASSESSEE BY : SHRI NIKHIL PATHAK / DATE OF HEARING : 15.07.2019 / DATE OF PRONOUNCEMENT : 04.09.2019 / ORDER PER D. KARUNAKARA RAO, AM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-4, PUNE DATED 18.09.2017 FOR THE ASSESSMENT YEAR 2014-15. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME-TAX (APPEAL) HAS ERRED IN DELETING THE ADDITION OF RS.1,38,47,980/- BY THE ASSESSING OFFICER U/S 80IA OF THE ACT, 1961, WHEN THE DEPARTMENT HAS APPROACHED HIGH COURT ON THE SAME ISSUE AND THE DECISION IS STILL PENDING WITH THE HIGH COURT. 2. FOR THIS AND SUCH OTHER REASONS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE CIT(A) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE APPELLANT CRAVES, LEAVE TO ADD, AMEND, ALTER OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE HONBLE TRIBUNAL. 2 ITA NO.132/PUN/2018 3. BRIEFLY STATED THE RELEVANT FACTS INCLUDE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF SHEET METAL FABRICATION AND JOB WORK AND MANUFACTURING OF AUTO COMPONENTS. THE ASSESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.16,61,46,380/-. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE CLAIMED DEDUCTION U/S 80IA(4) OF THE ACT. HOWEVER, THE ASSESSING OFFICER DENIED THE CLAIM OF DEDUCTION INVOKING THE PROVISIONS OF SECTION 80IA(5) OF THE ACT AND HELD THAT THERE IS NO DEDUCTION FROM THE ELIGIBLE BUSINESS OF THE ASSESSEE. HOWEVER, THE CIT(A) AS PER DISCUSSION GIVEN IN PARA 6.3 OF HIS ORDER GRANTED RELIEF TO THE ASSESSEE RELYING ON THE PRECEDENT IN ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEAR 2008-09. 4. AGGRIEVED WITH THE SAID DECISION OF THE TRIBUNAL, THE REVENUE IS IN APPEAL BEFORE US WITH THE ABOVE EXTRACTED GROUNDS. 5. ON HEARING BOTH THE SIDES AND PERUSING THE ORDER OF THE CIT(A), WE FIND THE CIT(A) RELYING ON THE DECISION OF ITAT IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2008-09 GRANTED RELIEF TO THE ASSESSEE. IN THE CASE OF ASSESSEE FOR THE ASSESSMENT YEAR 2008-09, THE TRIBUNAL FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH DECISION IN THE CASE OF SERUM INSTITUTE OF INDIA IN ITA NOS.1578/PUN/2012 AND 1618/PUN/2012 RELATING TO THE ASSESSMENT YEAR 2008-09 UPHELD THE ORDER OF THE CIT(A) AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. WHILE GRANTING THE RELIEF TO THE ASSESSEE, THE TRIBUNAL ALSO RELIED ON THE CBDT CIRCULAR NO.1/2016 DATED 15.02.2016 AND MANY OTHER PRECEDENTS ON THIS ISSUE. FOR THE SAKE OF COMPLETENESS, THE SAID PARA 6.3 OF THE ORDER OF THE CIT(A) IS EXTRACTED HEREUNDER :- 3 ITA NO.132/PUN/2018 6.3 DECISION: ON A CAREFUL PERUSAL OF THE ASSESSMENT ORDER AND THE MATERIAL PLACED BEFORE ME INCLUDING THE ITAT ORDER, IT IS OBSERVED THAT THE HON. ITAT IN THE APPELLANTS OWN CASE FOR A.Y. 2008-09 IN PARA 9 HAS HELD AS UNDER : 9. WE HAVE ALREADY ADJUDICATED SIMILAR ISSUE VIDE ORDER OF EVEN DATE IN CROSS APPEALS IN SERUM INSTITUTE OF INDIA VS. ADDL.CIT AND ADDL.CIT VS. SERUM INSTITUTE OF INDIA IN ITA NOS.1578/PN/2012 AND 1618/PN/2012 RELATING TO ASSESSMENT YEAR 2008-09, HOLDING AS UNDER : 26. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF TRADING AND DEALING IN PHARMACEUTICALS. FURTHER, THE ASSESSEE HAD SET UP TWO WINDMILLS FOR GENERATION OF POWER IN ASSESSMENT YEAR 2002-03. THE ASSESSEE OPTED FOR ASSESSMENT YEAR 2004-05 AS THE FIRST YEAR FOR CLAIM OF DEDUCTION BY EXERCISING THE OPTION AVAILABLE UNDER SECTION 80IA(2) OF THE ACT. THE ASSESSING OFFICER HOWEVER, DENIED THE DEDUCTION CLAIMED UNDER SECTION 80IA(5) OF THE ACT, IN VIEW OF THE OPTION OF INITIAL ASSESSMENT YEAR. THE CBDT RECENTLY VIDE CIRCULAR NO.1/2016, DATED 15.02.2016 HAD CLARIFIED THE TERM INITIAL ASSESSMENT YEAR UNDER SECTION 80IA(5) OF THE ACT. THE CBDT HAS CLARIFIED THAT IT IS ABUNDANTLY CLEAR FROM SUBSECTION 2 OF SECTION 80IA OF THE ACT THAT THE ASSESSEE HAS THE OPTION TO CHOOSE THE FIRST YEAR. IT IS ALSO CLARIFIED THAT INITIAL ASSESSMENT YEAR WOULD MEAN THE FIRST YEAR OPTED BY THE ASSESSEE FOR CLAIMING DEDUCTION UNDER SECTION 80IA OF THE ACT. THE CBDT HAS ALSO DIRECTED THE ASSESSING OFFICERS TO ALLOW DEDUCTION UNDER SECTION 80IA OF THE ACT IN ACCORDANCE WITH THIS CLARIFICATION. IT HAS ALSO DIRECTED THAT PENDING LITIGATION ON ALLOWABILITY OF DEDUCTION UNDER SECTION 80IA OF THE ACT SHALL NOT BE PURSUED TO THE EXTENT IT RELATES TO INTERPRETING INITIAL ASSESSMENT YEAR AS MENTIONED IN SUB-SECTION 5 OF SECTION 80IA OF THE ACT. THE COPY OF CIRCULAR IS PLACED ON RECORD. FURTHER, SIMILAR ISSUE OF CLAIM OF INITIAL ASSESSMENT YEAR AROSE BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEARS 2004-05 TO 2006-07 AND THE TRIBUNAL IN ITA NO S.290 TO 292/PN/2010, VIDE ORDER DATED 28.09.2011 ACCEPTED THE PLEA OF ASSESSEE AND HELD THAT THE ASSESSEE HAS THE OPTION IN CHOOSING THE INITIAL ASSESSMENT YEAR I.E. 2004-05 IN THE INSTANT CASE AND HELD THAT ONLY THE LOSSES OF THE YEAR BEGINNING FROM INITIAL ASSESSMENT YEAR WERE TO BE BROUGHT FORWARD AND NOT THE LOSSES OF EARLIER YEAR WHICH HAD ALREADY BEEN SET OFF AGAINST THE OTHER INCOME OF ASSESSEE. IT WAS FURTHER HELD BY THE TRIBUNAL THAT THE REVENUE COULD NOT NOTIONALLY BRING FORWARD ANY LOSS OF EARLIER YEARS WHICH HAD ALREADY BEEN SET OFF AGAINST ANY OTHER INCOME OF THE ASSESSEE AND SET OFF THE SAME AGAINST THE CURRENT INCOME OF THE ELIGIBLE BUSINESS. APPLYING THE SAID DECISION IN ASSESSEES OWN CASE AND IN VIEW OF THE CIRCULAR OF CBDT (SUPRA), WE UPHOLD THE ORDER OF CIT(A) AND DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 6.3.1 RESPECTFULLY, FOLLOWING THE DECISION OF THE HONBLE TRIBUNAL ON THE ISSUE IN THE APPELLANTS OWN CASE FOR A.Y. 2008-09 (SUPRA), THE ASSESSING OFFICER IS DIRECTED TO ALLOW DEDUCTION OF RS.1,38,47,980/- CLAIMED U/S. 80IA. GROUND NOS.1 TO 5 IS THUS ALLOWED. 4 ITA NO.132/PUN/2018 6. FROM THE ABOVE, IT IS EVIDENT THAT THE SIMILAR DEDUCTION WAS FOUND CLAIM BY THE ASSESSEE AND ALLOWED BY THE TRIBUNAL IN THE EARLIER YEAR. NO REASON IS MADE OUT BY THE LD. DR FOR THE REVENUE FOR DEVIATING FROM THE SAID DECISION OF THE TRIBUNAL BEFORE US. 7. IN ANY CASE, THE ISSUE RELATING TO THE PENDING OF APPEAL BEFORE THE HONBLE HIGH COURT IN ASSESSEES OWN CASE AGAINST THE ORDER OF THE TRIBUNAL FOR THE EARLIER ASSESSMENT YEAR, IS NO GROUND BEFORE US TO GRANT RELIEF, IF ANY. THEREFORE, THE RELEVANT GROUND RAISED BY THE REVENUE IS DISMISSED 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 04 TH DAY OF SEPTEMBER, 2019. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 04 TH SEPTEMBER, 2019. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-4, PUNE. 4. THE PR. CCIT, PUNE. 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.