M/s Shivam Industries, Shimla V. ITO, Shimla

ITA 1412/CHANDI/2010

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9801 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-07-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 15-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: RAVI SHANKAR SHRI AJAY JAIN
• Section: 142(1); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT ITA NO. 1412/CHD/2010 ASSESSMENT YEAR: 2005-06 M/S SHIVAM INDUSTRIES, VS. THE ITO PLOT NO. 13A WARD 3 INDL . AREA, SHOGHI, SHIMLA SHIMLA PAN NO. ABCFS9246H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAVI SHANKAR SHRI AJAY JAIN RESPONDENT BY : SHRI S.K. MITTAL DATE OF HEARING : 16/07/2015 DATE OF PRONOUNCEMENT: 22/07/2015 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), SHIMLA , DT. 15/11/2010 RELATING TO ASSESSMENT YEAR 2005-06. 2 . IN THIS APPEAL THE ONLY ISSUE RAISED BY THE ASSESSE E RELATES TO DISALLOWANCE UNDER SECTION 80IB OF THE INCOME-TA X ACT 1961 (IN SHORT THE ACT). 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE DERIVES INCOME FROM RUNNING A FLOUR MILL. FOR THE AY 2005-06, THE ASSESSEE FILED ITS RETURN OF INCOME ON 31/10/2005, DECLARING NIL INCOME. THE RET URN WAS PROCESSED UNDER 2 SECTION 143(1) OF THE ACT ON 16/09/2006. SUBSEQUENT LY THE CASE OF THE ASSESSEE WAS SELECTED UNDER SCRUTINY AND STATUTORY NOTICES U NDER SECTION 143(2) AND 142(1) OF THE ACT WERE ISSUED. THE AO VIDE QUESTION NAIRE DT. 06/11/2006, ASKED THE ASSESSEE TO JUSTIFY THE CLAIM OF DEDUCTION UNDE R SECTION 80IB(2)(III) OF THE ACT. IN RESPONSE TO THE SAME, THE ASSESSEE FILED WRITTEN REPLY DT. 11/12/2007. AFTER RECEIVING THE SAID REPLY, THE AO VIDE ORDER SHEET E NTRY DATED 27/12/2007 ASKED THE ASSESSEE TO SHOW-CAUSE AS TO WHY THE DEDUCTION CLAIMED UNDER SECTION 80IB(2)(III)SHOULD NOT BE DISALLOWED AS IN ITS PLAC E NEW SECTION 80IC HAS BEEN INSERTED W.E.F 01/04/2004. IN RESPONSE TO THE SAID NOTICE THE ASSESSEE FILED WRITTEN REPLY DT. 28/12/2007 WHICH HAS BEEN REPRODUCED BY T HE AO IN PARA 3 OF THE ASSESSMENT ORDER. THE ASSESSEE ALSO SUBMITTED ANOTH ER REPLY ON 28/12/2007, WHICH IS ALSO REPRODUCED BY THE AO IN PARA 4 OF THE ASSESSMENT ORDER. THE ASSESSEE ALSO SUBMITTED REVISED FORM 10CCB STATING THAT IN THE ORIGINAL FORM FILED ALONGWITH THE RETURN IN WHICH INADVERTENTLY SOME ER RORS REGARDING DATES HAD OCCURRED BECAUSE OF OVERSIGHT. 4. AO ADMITTED THAT THE ASSESSEE FIRM IS ENGAGED IN THE MANUFACTURING ACTIVITY AND IS MANUFACTURING FLOUR A ND ITS ALLIED PRODUCTS. HOWEVER, THE AO WAS OF THE VIEW THAT THE DEDUCTION UNDER SECTION 80IB IS NOT AVAILABLE TO THE ASSESSEE AS THE DATE OF COMMENCEMENT OF OPERATION/ACTIVITY MENTIONED IN FOR M 10CCB SUBMITTED BY THE ASSESSEE ALONGWITH THE RETURN OF I NCOME WAS OCTOBER 2004, WHICH IS RELEVANT TO AY 2005-06. IT WAS HELD ON THE BASIS THAT BY THE AMENDMENT BROUGHT OUT IN THE ACT BY THE FINANCE ACT 2003, W.E.F 01/04/2004, A NEW SECTION 80IC HAS BEEN INSERTED. THE AO ALSO HELD THAT THE INDUSTRIAL UNDERTAKING / ENTERPRISE IS NOT EVEN ELIGIBLE FOR DEDUCTION UNDER SECTION 80IC AS T HE SAME IS 3 AVAILABLE W.E.F 01/04/2004, EXCEPT THOSE WHICH ARE LISTED IN THIRTEENTH SCHEDULE. SINCE THE FLOUR MILL IS MENTIO NED AT ITEM NO. 8 IN THE THIRTEENTH SCHEDULE, THE ASSESSEE WAS DENIED DE DUCTION UNDER SECTION 80IC. 5. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE C ARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). THE ASSESSE E CLAIMED THAT THERE WAS A CLERICAL MISTAKE IN DATE OF COMMENCEMEN T OF OPERATION / ACTIVITY MENTIONED IN FORM NO. 10CCB FILED ALONGW ITH THE RETURN OF INCOME. IT WAS SUBMITTED THAT THE DULY RECTIFIED FORM NO. 10CC B WAS FILED BEFORE THE AO. IN FORM NO. 10CCB FILED WITH THE RETURN OF INCOME, THE DATE OF COMMENCEMENT WAS WRONGLY MENTIONED AS OCTOBER 2004.WHILE IN THE REVISED FORM NO. 10CCB CORRECT DATE I.E.; 21/12/2003 WAS SUBSTITUTED. ACCO RDING TO THE ASSESSEE, THE CORRECT DATE OF COMMENCEMENT OF PRODUCTION IS DECEM BER 2003 AND IN THE ORIGINAL FORM INITIAL AY WAS ALSO CORRECTLY MENTION ED AS 2004-05. HOWEVER, THE CIT(A) DID NOT AGREE WITH THE ASSESSEE AND UPHELD T HE DISALLOWANCE SO MADE BY THE AO. 6. WE HAVE HEARD SHRI. RAVIN SHANKAR, AND SHRI RAVI JAIN LD. REPRESENTATIVE OF THE ASSESSEE AND SHRI. S.K.MITTAL LD. DR AT LENG TH. MAIN ARGUMENT ON BEHALF OF THE ASSESSEE IS THAT THE FIRM HAD ACTUALLY STARTED OPERATION/ACTIVITY AS ON 21/12/2003 AND NOT IN OCTOBER 2004, AS WAS WRONGLY MENTIONED IN FORM NO. 10CCB FILED WITH RETURN OF INCOME. IT WAS ALSO CONT ENDED THAT THE RECTIFIED FORM NO. 10CCB WAS DULY FILED BEFORE THE AO, SUBSTITUTIN G THE DATE TO 21/12/2003. IT WAS ALSO POINTED OUT THAT THE ASSESSEE HAD ALSO CLA IMED DEDUCTION UNDER 80IB IN THE EARLIER YEAR I.E.; 2004-05. THE CLAIM OF THE ASSESSEE HAS BEEN ACCEPTED AND IN THAT YEAR IN FORM NO. 10CCB, THE DATE OF COM MENCEMENT OF 4 OPERATION/ACTIVITY BY THE UNDERTAKING WAS SHOWN AS 21/12/2003. THE DEDUCTION CLAIMED UNDER SECTION 80IB HAS BEEN ALLOWED TO THE ASSESSEE IN THE AY 2004-05. THE LD. REPRESENTATIVE OF THE ASSESSEE VEHEMENTLY A RGUED THAT THE REVENUE HAS ALLOWED DEDUCTION UNDER SECTION 80IB IN EARLIER YEAR AS WELL AS IN SUBSEQUENT YEARS ACCEPTING THE DATE OF COMMENCEMENT OF OPERATI ON / ACTIVITY AS 21/12/2003, AND THEREFORE THE SAME CANNOT BE DENIED IN THIS YEAR. IT IS A FACT ON RECORD THAT THE DATE OF COMMENCEMENT OF OPERATION/A CTIVITY STATED BY THE ASSESSEE IN FORM NO. 10CCB FILED ALONGWITH THE RETU RN WAS OCTOBER, 2004. FORM NO. 10CCB WAS REVISED BY THE ASSESSEE DURING THE CO URSE OF ASSESSMENT PROCEEDINGS, WHERE BY THE DATE WAS SUBSTITUTED TO 2 1/12/2003 AS CAN BE SEEN FROM THE PERUSAL OF PAGE 49 OF PAPER BOOK FILED BY THE ASSESSEE. ON A PERUSAL OF FORM NO. 10 CCB FILED BY THE ASSESSEE FOR THE AY 20 04-05 IT IS NOTICED THAT THE DATE OF COMMENCEMENT OF OPERATION / ACTIVITY HAS BE EN STATED TO BE 21/12/2003. I HAVE ALSO PERUSED THE INTIMATION ISSU ED UNDER SECTION 143(1)(A) DT. 06/10/2005 FOR THE AY 2004-05 WHERE BY THE CLAIM OF THE ASSESSEE HAS BEEN ACCEPTED. THE RETURN OF INCOME FOR THE RELEVANT ASS ESSMENT YEAR WAS FILED ON 31/10/2005 WHICH IS A DATE LATER TO THIS INTIMATION . FORM NO. 10CCB STATING THE DATE OF COMMENCEMENT TO BE OCTOBER, 2004 WAS FILED WITH THIS RETURN OF INCOME. IN VIEW OF THESE FACTS THE BONAFIDE OF THE ASSESSEE CANNOT BE OVER LOOKED. FURTHER THE ASSESSEE HAD ALSO FILED PAPER B OOK TO DEMONSTRATE THAT THE DEDUCTION UNDER SECTION 80IB HAS BEEN CLAIMED BY TH E ASSESSEE FOR AY 2006-07, 2007-08 AND 2008-09 ALSO, WHICH WAS DULY ALLOWED TO HIM. SH. RAVI SHANKAR, THE LD. COUNSEL FOR THE ASSESSEE STATED AT THE BAR THAT THE DEDUCTION UNDER SECTION 80IB(2)(III) HAS BEEN CLAIMED FROM AY 2004-05 TO 20 12-13 AND HAS BEEN ALLOWED IN ALL THE YEARS EXCEPT FOR AY 2005-06 I.E. THE IMP UGNED YEAR. IN VIEW OF THESE FACTS IT CANNOT BE DENIED THAT THERE WAS A CLERICAL MISTAKE WHILE FILING FORM NO. 10CCB WITH THE RETURN OF INCOME AND THE DEPARTMENT HAVING ALLOWED THE 5 DEDUCTION UNDER SECTION 80IB TO THE ASSESSEE ALL AL ONG I.E.; PRIOR TO AND LATER TO THE RELEVANT ASSESSMENT YEAR. THERE IS NO REASON TH AT THE SAME CANNOT BE ALLOWED IN THE RELEVANT AY. FOR THE PROPOSITION THA T FORM NO. 10CCB CAN BE FILED AT ANY TIME DURING THE ASSESSMENT PROCEEDINGS, THE COUNSEL OF THE ASSESSEE RELIED ON THE JUDGMENT OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. PUNJAB FINANCIAL COOPERATION (2001) 254 ITR 6(P&H), WHEREIN, IT HAS BEEN HELD THAT THE DELAYED FILING OF AUDIT REPORT FOR CL AIMING DEDUCTION U/S 32AB(5) OF THE ACT, DOES NOT DISENTITLE THE ASSESSEE FROM CLAI MING THE BENEFIT U/S 32AB(1). IN VIEW OF THE ABOVE THE REVISED FORM NO. 10CCB FILED BY THE ASSESSEE BEFORE THE AO IS HELD TO BE THE VALID FORM NO. 10CCB. 7. IN VIEW OF THE ABOVE DISCUSSION THE ORDER OF THE CIT(A) IS SET ASIDE AND THE A.O IS DIRECTED TO ALLOW THE DEDUCTION UNDER SECTIO N 80IB OF THE ACT, TO THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 22/07/2015 SD/- (H.L.KARWA) VICE PRESIDENT DATED : 22/07/2015 AG COPY TO:1. THE APPELLANT,2. THE RESPONDENT,3.THE CI T, 4.THE CIT(A),5. THE LD. DR