ESTER-LUB TECHNOLOGIES, MUMBAI V. I.T.O. 15(3), MUMBAI

ITA 14/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8292 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 10-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 02-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIPDR
• Assessee Lawyers: PATHIK B SHAH
• Section: 80IB

Judgement Text

, , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI , .. , ! ' # BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI B.R.BASKARAN, ACCOUNTANT MEMBER . / ITA NO.14/MUM/2012 $ $ $ $ / ASSESSMENT YEAR: 2008-09 M/S. ESTER-LUB TECHNOLOGIES 205/206, KALPATARU PLAZA CHINCHOLI BUNDER ROAD MALAD, (W) MUMBAI-400 064. VS. INCOME TAX OFFICER WARD -12(2)(3), MUMBAI. ( %& / ASSESSEE) ( ' / REVENUE) P.A. NUMBER : AAKFM 0861 D %& ( (( ( ) ) ) ) / ASSESSEE BY SHRI PATHIK B. SHAH ' ( (( ( ) ) ) ) /REVENUE BY : SHRI NEIL PHILIP-DR ( &*! / DATE OF HEARING : 10/12/2014 +,$ ( &*! / DATE OF PRONOUNCEMENT : 10/12/2014 ' - ' - ' - ' - / O R D E R PER JOGINDER SINGH (JM) : THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 03/10/2011 PASSED BY THE LD. CIT(A) FOR THE A SSESSMENT YEAR 2008-09, ON THE FOLLOWING GROUNDS. 1 . THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN 2 M/S. ESTER-LUB TECHNOLOGIES FACT AND IN LAW IN HOLDING THAT INCOME DERIVED FROM JOB WORK ACTIVITY ETC. BY ELIGIBLE UNIT U/S 80IB ARE NOT DER IVED FROM ELIGIBLE BUSINESS OF ELIGIBLE INDUSTRIAL UNDERTAKING U/S 80I B AND TO DISALLOW THE CLAIM OF RS. 46,23,016/U/S 801B. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN FACT AND IN LAW IN NOT FOLLOWING THE DECISION OF CI T (APPEAL) IN AY 2007-08 IN ASSESSEE'S OWN CASE WHERE DEDUCTION U/S 80IB IS ALLOWED ON SAME FACTS AND GROUNDS AND WHICH IS NOT DISPUTED BY INCOME TAX DEPARTMENT BEFORE HONORABLE TRIBUNAL AND ACCEPTED BY I.TAX DEPARTMENT. 2. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASS ESSEE, SHRI PATHIK B. SHAH, CONTENDED THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT BY CONTENDING THAT TH E TRIBUNAL ALLOWED THE APPEAL OF THE ASSESSEE FOR A.Y. 2007-08 AND THE ITO HAS GIVEN EFFECT TO THE DIRECTION OF THE TRIBUNAL. RELIANCE WAS PLACED UPON OTHER DECISIONS AS MENTIONED IN THE PAP ER BOOK. ON THE OTHER HAND, THE LD. DR, SHRI NIEL PHILIP, CO NTENDED THAT THERE IS NO MANUFACTURING AS SUCH, THEREFORE, THE C LAIMED DEDUCTION U/S 80IB OF THE ACT WAS RIGHTLY DENIED TO THE ASSESSEE. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURIN G OF LUBRICATING OIL AND ANTISTATIC CONNING OIL AS HAS B EEN MENTIONED EVEN IN PARA 3 (PAGE -2) OF THE ASSESSMENT ORDER IT SELF. THE ENTIRE PROFIT SHOWN IN THE PROFIT & LOSS ACCOUNT WA S CLAIMED AS 3 M/S. ESTER-LUB TECHNOLOGIES DEDUCTION U/S 80IB(5) OF THE ACT. THE LD. ASSESSIN G OFFICER DECLINED THE CLAIM AGAINST WHICH THE ASSESSEE FILED APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) . THE LD. FIRST APPELLATE AUTHORITY VIDE ORDER DATED 03/10/20 11 APPROVED THE STAND OF THE ASSESSING OFFICER, AGAINS T WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE THIS TRIBUNAL. 2.2. WE FIND THAT THE TRIBUNAL VIDE ORDER DATED 13/06/20 12 (ITA NO.4154/MUM/2011), WHICH WAS RECTIFIED ON 16/0 8/2013 AS THERE WAS A TYPING MISTAKE, ALLOWED THE APPEAL O F THE ASSESSEE. WITHOUT GOING INTO MUCH DELIBERATION AND THE DECISION IN DAMAN PLASTIC (ITA NO. 7506/MUM/2012) D ATED 01 ST FEBRUARY, 2013, CIT VS IMPEL FORGE AND ALLIED INDUS TRIES LTD. (2008-TIOL-760-HC-P&H-IT), CIT VS SADHU FORGING LTD . (2011- TIOL-361-HC-DEL-IT), LIBERTY INDIA VS CIT 317 ITR 2 18, WE ARE OF THE VIEW, THAT THE ASSESSEE IS ENTITLED FOR DEDU CTION U/S 80IB OF THE ACT. EVEN OTHERWISE, A PROVISION IN THE TAX ING STATUTE GRANTING INCENTIVES FOR PROMOTING GROWTH AND DEVELO PMENT SHOULD BE CONSTRUED LIBERALLY. OUR VIEW IS FORTIFI ED BY THE DECISION IN BAJAJ TEMPO LTD. VS CIT 62 TAXMAN 480 ( SC). THE ASSESSING OFFICER DENIED THE DEDUCTION MERELY ON TH E GROUND THAT THE ASSESSEE WAS DOING JOB WORK FOR THE SISTER CONCERN, THEREFORE, ULTIMATE PRODUCT WAS PRODUCED BY SISTER CONCERN. ASSESSEE CLAIMED THAT IDENTICALLY FOR A.YS. 2005-06 AND 2006- 07, THE CLAIM OF THE ASSESSEE WAS ACCEPTED. THE AS SESSEE HAS PRODUCED EMULSIFIER BY USING RAW MATERIAL LIKE FATT Y ACIDS, GLYCOLS, VEGETABLE OILS, CAUSTIC SODA, AND OTHER AD DITIVES, 4 M/S. ESTER-LUB TECHNOLOGIES CONSEQUENTLY, THE END PRODUCT IS COMMERCIALLY K NOWN DIFFERENTLY, THEREFORE, IN OUR VIEW, THE NEW ARTIC LE/NEW PRODUCT EMERGED/MANUFACTURED, CONSEQUENTLY, THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80IB OF THE ACT. OUR VIEW IS FO RTIFIED BY THE DECISION AND THE RATIO LAID DOWN IN CIT VS VINBROS & COMPANY 210 TAXMAN 252 (SC), CIT VS ZAINAB TRADING PVT. LTD . 333 ITR 144 (MAD.), CIT VS ESQUIRE TRANSLAM INDUSTRIES 344 ITR 308 (MAD.), TITANOR COMPONENTS LTD. VS CIT 197 TAXMAN 4 41 (DEL.), CIT VS AMBUJA GINNING PRESSING & OIL COMPANY PVT. L TD. 203 TAXMAN 34 (MAG) /15 TAXMAN.COM 273 (GUJ.) AND MIDAS POLYMER COMPOUNDS PVT. LTD. VS ACIT (2011) 197 TAXM AN 481 (KER.)(FB). SINCE, THE END PRODUCT WAS COMMERCI ALLY KNOWN DIFFERENTLY, THEREFORE, IT CAN BE SAID THAT IT WAS MANUFACTURING ACTIVITY DONE BY THE ASSESSEE, THEREFORE, IN VIEW O F THE DISCUSSION MADE HEREINABOVE, WE ARE OF THE VIEW THA T ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80IB OF THE ACT. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF HEARING ON 10/12/2014. SD/- SD/- ( B.R. BASKARAN) ( JOGINDE R SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 10/12/2014 JV, SR. PS B F{X~{T? P.S/. . . 5 M/S. ESTER-LUB TECHNOLOGIES ' - ' - ' - ' - ( (( ( .&/ .&/ .&/ .&/ 0 /$& 0 /$& 0 /$& 0 /$& / COPY OF THE ORDER FORWARDED TO : 1. 12 / THE APPELLANT 2. .312 / THE RESPONDENT. 3. 4 ( ) / THE CIT(A)- 4. 4 / CIT 5. /5 .& , , / DR, ITAT, MUMBAI 6. 56 7 / GUARD FILE. ' - ' - ' - ' - / BY ORDER, 3/& .& //TRUE COPY// 8 88 8 / 9 9 9 9 ' ' ' ' (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI