ACIT, Central Circle - XXV, Kolkata, Kolkata V. M/s. Ambo Exports(P)Ltd, Kolkata

ITA 1403/KOL/2012

• Counselvise Citation: 140323514 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 01-10-2012
• Court: TRIBUNAL
• Assessee Lawyers: N P JAIN LD

Judgement Text

, C , INCOME TAX APPELLATE TRIBUNAL, BENCH- C KOLKATA ( ) BEFORE . , ! SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER '#$ /AND 1 & ' , ! SHRI GEORGE MATHAN, JUDICIAL MEMBER $( / ITA NO.1403/KOL/2012 A.Y 2005-06 ITA NOS.1518 & 1 519/KOL/2011 A.YS. 2006-07 & 2007-08 A.C.I.T,CC-XXV, KOLKATA - #' - - VERSUS - . M/S. AMBO EXPORTS PVT. LTD PAN: AACCA 5668B ( &* / APPELLANT ) ( +,&* / RESPONDENT ) &* .' / FOR THE APPELLANT SMT. SUCHETA CHATTOPADHYAY, LD.JCIT/SR.DR +,&* .' / FOR THE RESPONDENT: / SHRI N.P. JAIN, ADVOCATE, LD.AR /'#0 1 2 /DATE OF HEARING : 27-01-2014 34 1 2 /DATE OF PRONOUNCEMENT: 30-01-2014 5 / ORDER 1 &' , ! SHRI GEORGE MATHAN, JUDICIAL MEMBER: ITA NO. 1403/KOL/2012 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-X XIV, KOLKATA IN APPEAL NO. 1015/CIT(A)-XXIV/CIR-8/11-12 DATED 31-07-2012 FOR T HE ASSESSMENT YEAR 2005-06, ITA NO.1518/KOL/2011 IS AN APPEAL FILED BY THE REVE NUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-VIII, KOLKATA IN APPEAL NO. 322/CIT(A)-VIII/KOL/08-09 DATED 05-08-2011 FOR TH E ASSESSMENT YEAR 2006-07 AND ITA NO. 1519/KOL/2011 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-VIII, KOLKATA IN APPEAL NO.335/CIT(A)-VIII/KOL/09-10 DATED 05-08-2011 FOR THE ASSESSMENT YEAR 2007-08 RESPECTIVELY. 2. AS ALL THE REVENUES APPEALS RELATE TO THE SAME ASSESSEE AND ARE INTER- CONNECTED, THE SAME ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NOS. 1403/K/12 &, 1518 & 1519/KOL/11-C M/S. AMB O EXPORTS LTD 2 3. SMT. SUCHETA CHATTOPADHYAY, LD. JCIT/SR.DR REPR ESENTED ON BEHALF OF THE REVENUE AND SHRI N.P. JAIN, ADVOCATE, LEARNED AR REPRESENTED ON BEHALF OF THE ASSESSEE. 4. IN THE REVENUES APPEAL IN ITA NO.1403/KOL/2012 FOR A.Y 2005-06, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - I) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD.CIT(A) ERRED BOTH IN FACTS AS WELL AS IN LAW IN DELETING T HE DISALLOWANCE OF RS.85,23,613/- MADE BY THE AO DENYING EXEMPTION U/S . 10A OF THE INCOME TAX ACT WITHOUT PROPER APPRECIATION OF ARGUM ENT PUT FORWARD BY THE AO AND MATERIALS BROUGHT ON RECORD WHILE PAS SING THE ASSESSMENT ORDER. 2) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CA SE, LD.CIT(A) ERRED BOTH IN FACTS AS WELL AS IN LAW IN DELETING THE DISALLOWANCE MADE BY THE AO U/S. 10A OF THE INCOME TAX ACT WITHO UT PROPER APPRECIATION OF THE FACT THAT THE ASSESSEE HAS NOT CLAIMED ANY EXEMPTION FOR LATER YEARS RELEVANT TO ASSESSMENT YE ARS 2008-09 AND 2009-10 AND ONWARDS U/S. 10A OF THE INCOME TAX ACT. 5. IN THE REVENUES APPEAL IN ITA NO.1518/KOL/2011 FOR A.Y 2006-07, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- I. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD.CIT(A) HAS ERRED IN ALLOWING THE EXEMPTION U/S.1 0A THROUGH THE BLENDING OF TEA DOES NOT INVOLVE MANUFACTURING OR P RODUCTION ACTIVITY. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD.CIT(A) HAS ERRED IN ALLOWING THE DEDUCTION CLAI MED ON ACCOUNT OF PRE-OPERATIVE EXPENSES THOUGH IT WAS CAPITAL IN NATURE. 6 IN THE REVENUES APPEAL IN ITA NO.1519/KOL/2011 FOR A.Y 2007-08, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - I. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD.CIT(A) HAS ERRED IN ALLOWING THE EXEMPTION U/S.1 0A THROUGH THE BLENDING OF TEA DOES NOT INVOLVE MANUFACTURING OR P RODUCTION ACTIVITY. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD.CIT(A) HAS ERRED IN ALLOWING THE DEDUCTION CLAI MED ON ACCOUNT OF PRE-OPERATIVE EXPENSES THOUGH IT WAS CAPITAL IN NATURE. 7. AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LEARNED SR.DR THAT THE ISSUES IN THE REVENUES APPEALS IN ITA NO. 1403/KOL/2012 FOR THE ASSESSMENT YEAR 2005-06 THE ITA NOS. 1403/K/12 &, 1518 & 1519/KOL/11-C M/S. AMB O EXPORTS LTD 3 GROUND NOS. 1 & 2, IN ITA NO. 1518/KOL/2011 FOR THE ASSESSMENT YEAR 2006-07 THE GROUND NO.1 AND IN ITA NO.1519/KOL/2011 FOR THE ASSESSMENT YEAR 2007-08 THE GROUND NO.1 WERE AGAINST THE ACTION OF THE LD.CIT(A) IN ALLOWING THE ASSESSEES CLAIM OF EXEMPTION U/S. 10A OF THE I.T ACT 1961 IN RESPECT OF ISSUE OF BLENDING O F TEA. IT WAS THE SUBMISSION THAT THERE WAS NO MANUFACTURING PROCESS IN THE BLENDING OF TEA. IT WAS THE FURTHER SUBMISSION THAT THOUGH THE ASSESSEE HAS CLAIMED THAT THE ISSUE OF BLENDING OF TEA AND LIST OF MACHINERY BOTH HAVE BEEN PROVIDED, STILL THE ASSESSEE HAS NOT SHOWN THA T THERE WAS BLENDING PROCESS. IT WAS THE SUBMISSION THAT THE ORDERS OF THE LD.CIT(A) ON THIS ISSUE WERE LIABLE TO BE REVERSED. 8. IN REPLY, THE LEARNED AR FOR THE ASSESSEE HAS S UBMITTED THAT THE ISSUES IN THE APPEALS WERE SQUARELY COVERED BY THE ORDER/DECISION OF THE HONBLE SPECIAL BENCH OF THIS TRIBUNAL [ITAT KOLKATA] IN THE CASE OF MADHU JAYANTI INTERN ATIONAL LTD VS. DCIT,CIR-1, KOL & ORS [2012] IN ITA NO. 1463/KOL/2007 A.Y 2004-05 DATED 2 0-07-2012, WHEREIN THE HONBLE SPECIAL BENCH OF THE TRIBUNAL HAD HELD THAT IN RESPECT OF BLENDING OF TEA THE ASSESSEE WAS ENTITLED TO DEDUCTION/EXEMPTION U/S. 10A. IT WAS THE SUBMISSIO N THAT THE LD.CIT(A) HAS DECIDED THE ISSUE BY FOLLOWING THE SAID DECISION OF THE HONBLE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MADHU JAYANTI INTERNATIONAL LTD (REFER TO SUPRA ). 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE HA VE ALSO PERUSED THE ASSESSMENT ORDERS AS ALSO THE SAID DECISION OF THE SPECIAL BEN CH OF THIS TRIBUNAL IN THE CASE OF MADHU JAYANTI INTERNATIONAL LTD (REFER TO SUPRA). ON PERU SAL OF THE SAID DECISION OF THE HONBLE SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF MADHU JAYANTI INTERNATIONAL LTD (REFER TO SUPRA) CLEARLY SHOWS THAT IN THAT CASE THE ASSESSEE IS D OING THE BUSINESS OF BLENDING OF TEA, WHO ARE HELD TO BE ENTITLED TO EXEMPTION U/S. 10A OF TH E I.T ACT 1961. IT IS FURTHER NOTICED THAT THE HONBLE SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF MADHU JAYANTI INTERNATIONAL LTD (REFER TO SUPRA) HAS RESTORED THE ISSUES BACK TO THE DIVISI ON BENCHES IN THAT CASE WITH THE DIRECTION TO DECIDE THE APPEALS IN THE LIGHT OF PRINCIPLES LAID DOWN IN THE CASE OF MADHU JAYANTI INTERNATIONAL LTD (REFER TO SUPRA). A PERUSAL OF TH E ASSESSMENT ORDER AS ALSO THE ORDER OF THE LD. CIT(A) IN THE CASE OF ASSESSEE DOES NOT SHOW A S TO THE BLENDING OF TEA. IN THE CIRCUMSTANCES THE ISSUES IN THE APPEALS IN RESPECT OF CLAIM OF EXEMPTION U/S. 10A OF THE ACT ARE RESTORED TO THE FILE OF THE AO FOR EXAMINATION AND VERIFICATION AS TO WHETHER THE ASSESSEE IS DOING THE BUSINESS OF BLENDING OF TEA. IF THE AS SESSEE IS ABLE TO PROVE THAT IT DOING THE BUSINESS OF BLENDING OF TEA, THEN IN VIEW OF THE DE CISION OF THE HONBLE SPECIAL BENCH IN THE CASE OF MADHU JAYANTI INTERNATIONAL LTD (REFER TO S UPRA) THE AO IS DIRECTED TO GRANT THE ASSESSEE THE BENEFIT OF CLAIM OF EXEMPTION U/S. 10A OF THE ACT WITH THE ABOVE DIRECTION THIS ITA NOS. 1403/K/12 &, 1518 & 1519/KOL/11-C M/S. AMB O EXPORTS LTD 4 ISSUE IS RESTORED TO THE FILE OF THE AO FOR RE-ADJ UDICATION AFTER GRANTING THE ASSESSEE ADEQUATE OPPORTUNITY TO SUBSTANTIATE ITS CASE IN RE SPECT OF BLENDING OF TEA. 10. IN RESPECT OF GROUND NO. 2 IN ITA NOS. 1518 & 1 519/KOL/2011 FOR THE ASSESSMENT YEARS 2006-07 & 2007-08, IT WAS SUBMITTED BY THE LEARNED SR.DR THAT THIS ISSUE WAS AGAINST THE ACTION OF THE LD.CIT(A) IN ALLOWING THE CLAIM OF D EDUCTION ON ACCOUNT OF PRE-OPERATIVE EXPENSES THOUGH THE SAME WAS CAPITAL IN NATURE. SHE HAS VEHEMENTLY SUPPORTED THE ORDERS OF THE AO. 11. IN REPLY, THE LEARNED AR FOR THE ASSESSEE DREW OUR ATTENTION TO PAGE 27 OF THE ORDER OF THE LD.CIT(A), WHEREIN THE LD.CIT(A) HAS CONSIDERED THE FACTS AND THE SUBSTANTIAL EXPANSION PROGRAMME OF THE ASSESSEE AND HAS HELD THAT THE EXP ENDITURE WRITTEN OFF IS IN CONSONANCE WITH THE PROVISIONS OF SECTION 35D(1)(II) R.W.S 35D (2)OF THE ACT. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS TH E REVENUE HAS NOT BEEN ABLE TO DISLODGE THE FINDINGS AS ARRIVED BY THE LD.CIT(A) I N RESPECT OF PRE-OPERATIVE EXPENSES, WE ARE OF THE VIEW THAT THE FINDINGS OF THE LD.CIT(A) ON T HIS ISSUE IS ON A RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. CONSEQUENTLY, THE ORDERS OF THE LD.CIT(A) ON THIS ISSUE STAND CONFIRMED. 13. IN THE RESULT, ALL THE REVENUES APPEALS IN IT A NOS.1403/KOL/2012, 1518 & 1519/KOL/2011 FOR THE ASSESSMENT YEARS 2005-06,2006 -07 & 2007-08 STAND ALLOWED FOR STATISTICAL PURPOSE AS STATED ABOVE. 5 / 6 /' 7 8 THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT 30- 01-2014 SD/- SD/- ** PRADIP SPS 5 1 +..9 :94; / COPY OF THE ORDER FORWARDED TO: 1. . &* / THE APPELLANT : ACIT,CC-XXV 18 RABINDRA SARANI, KOL-1. 2 +,&* / THE RESPONDENT- M/S. AMBO EXPORTS PVT. LTD 3 P RETORIA ST,KOL-71 3 4. . .5' / THE CIT, .5' ( )/ THE CIT(A) ( . , ! ) ABRAHAMP.GEORGE,ACCOUNTANTMEMBER ( 1 & ' , ! ) GEORGE MATHAN, JUDICIAL MEMBER ( (( ( 2 2 2 2 ) )) ) DATE 30/01/2014 ITA NOS. 1403/K/12 &, 1518 & 1519/KOL/11-C M/S. AMB O EXPORTS LTD 5 5 . #<.7 +.' / DR, KOLKATA BENCH 6 . GUARD FILE . ,9 +./ TRUE COPY, 5'// BY ORDER, $ /ASSTT REGISTRAR