ACIT, CHENNAI V. Janani Holdings, CHENNAI

ITA 1442/CHNY/2013

• Counselvise Citation: 144221714 RSA 2013
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 27-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V SRINIVASAN ITP
• Section: 143(3); 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI [BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI S. S. GODARA, JUDICIAL MEMBER] I.T.A.NO.1442/MDS/2013 ASSESSMENT YEAR : 2008-09 THE ASSTT. COMMISSIONER OF INCOME-TAX CIRCLE XV CHENNAI VS M/S JANANI HOLDINGS 500, 32-38, CONGRESS BUILDINGS ANNA SALAI TEYNAMPET, CHENNAI 600 006 [PAN AADFJ 6634 N] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHAJI P. JACOB, ADDL. CIT RESPONDENT BY : SHRI V. SRINIVASAN, ITP DATE OF HEARING : 30-12-2013 DATE OF PRONOUNCEMENT : 30-12-2013 O R D E R PER S.S.GODARA, JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE FOR ASSESSMENT Y EAR 2008-09, IS DIRECTED AGAINST THE ORDER OF THE COMMI SSIONER OF INCOME- TAX (APPEALS)-XII, CHENNAI, DATED 25.3.2013, PASSED IN APPEAL NO.322/ 2010-11, IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). I.T.A.NO.1442/13 :- 2 -: 2. IN THE COURSE OF HEARING, THE REVENUE STRONGLY REI TERATES THE GROUNDS AND ARGUES THAT THE CIT(A) HAS ERRED IN DELETING DISALLOWANCE/ADDITION U/S 10B OF THE ACT AMOUNTING TO ` 2,50,02,395/- MADE BY THE ASSESSING OFFICER VIDE ASSESSMENT ORDER DATED 31.12.2010. PER REVENUE, THE CIT(A) OUGHT TO HAVE UPHELD THE IMPUGNED DISALLOWANCE INSTEAD OF DELETING IT. ACCO RDINGLY, IT PRAYS FOR ACCEPTANCE OF THE APPEAL. 3. THE ASSESSEE SUPPORTS THE FINDINGS OF THE CIT(A) I N DELETING THE IMPUGNED DISALLOWANCE BY PLACING ON RECORD COPY OF THE ORDER DATED 25.2.2011 PASSED BY THE TRIBUNAL IN ITS CA SE FOR ASSESSMENT YEAR 2007-08 IN I.T.A.NO.1094/MDS/2010. IT IS THE CONTENTION OF THE ASSESSEE THAT THERE IS NO DISTINCTION SO FAR AS THE FACTS OF THE TWO ASSESSMENT YEARS ARE CONCERNED AND THE CIT(A) HAS R IGHTLY HELD IT ENTITLED FOR DEDUCTION U/S 10B OF THE ACT. 4. THE ASSESSEE IS A FIRM. IT IS ENGAGED IN THE BU SINESS OF GRANITE EXPORT. ON 22.9.2008, THE ASSESSEE HAD RE TURNED LOSS OF ` 4,06,260/- WHICH WAS SUMMARILY PROCESSED. 5. IN THE COURSE OF SCRUTINY, THE ASSESSING OFFICER NOTICED THE ASSESSEE TO HAVE CLAIMED DEDUCTION U/S 10B OF ` 2,50,02,395/- BY I.T.A.NO.1442/13 :- 3 -: REPORTING EXPORT OF GRANITE. IN HIS VIEW, SINCE TH E ASSESSEES SALE INVOICES HAD TERMED THE GRANITE EXPORTED AS PROCES SED DIMENSIONAL ROUGH OR CRUDE GRANITE, FURTHER DESCRIBED AS ROUG H BLOCK IT WOULD MEAN THAT THE GRANITE EXPORTED WAS UNPOLISHED. A S PER THE ASSESSING OFFICER, ASSESSEES RELIANCE ON THE ORDER OF THE T RIBUNAL FOR ASSESSMENT YEAR 2005-06 WOULD ALSO NOT SUPPORT ITS CASE AS THE FACTS WERE DIFFERENT AS IN THE SAID YEAR THE GRANITE EXPO RTED WERE STATED TO HAVE BEEN POLISHED BEFORE BEING EXPORTED. THEREFO RE, HE OBSERVED IN THE ASSESSMENT ORDER THAT THE ASSESSEES ACTIVITY COULD NOT BE TERMED AS MANUFACTURE OR PRODUCTION SINCE THE GRANITE HA D ONLY BEEN MADE FIT FOR TRANSPORTATION. PROCEEDING ON THIS REASONI NG, THE ASSESSING OFFICER MADE DISALLOWANCE/ADDITION AND THE ASSESSE ES TOTAL INCOME WAS ASSESSED AT ` 2,45,96,135/-. 6. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL. IN THE LOWER APPELLATE PROCEEDINGS, THE CIT(A) HAS PLACED RELIAN CE ON THE ORDER OF THE TRIBUNAL FOR PREVIOUS ASSESSMENT YEAR 2007-08 AND DELETED THE ADDITION. THIS LEAVES THE REVENUE AGGRIEVED. I.T.A.NO.1442/13 :- 4 -: 7. WE HAVE HEARD BOTH PARTIES AND PERUSED THE CASE FIL E. THE ORDER OF THE TRIBUNAL (SUPRA) HAS ALSO BEEN GONE THROUGH. WE MAKE IT CLEAR THAT THE REVENUE HAS NOT FILED ANY PAPER BOOK OR DRAWN ANY DISTINCTION ON FACTS OF THE CASE SO FAR AS THE GRAN ITE EXPORTED IN THE IMPUGNED ASSESSMENT YEAR AS WELL AS THE PREVIOUS AS SESSMENT YEAR IS CONCERNED. IN THESE CIRCUMSTANCES, WE FIND THAT TH E CO-ORDINATE BENCH IN THE PREVIOUS ASSESSMENT YEAR 2007-08 HAD D ECIDED THE VERY QUESTION AGAINST THE REVENUE AS UNDER: 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE-FIRM IS ENGAGED IN THE BUSINESS OF EXPORTING GRANITE AND IT CLAIMED DEDUCTION U/S 10B OF THE INCOME-TAX ACT, 1961 (HEREINAFTER RE FERRED TO AS 'THE ACT' FOR SHORT) ON ITS PROFITS AMOUNTING TO ` 3,55,16,987/-. THE ASSESSEE EXPORTS GOODS AND IN THE SALES INVOICES IT DESCRIBED THE EXPORTED GOODS AS PROCESSED DIMENSIONAL ROUGH OR CRUDE GRANITE. THUS, THE GRANITE HAS BEEN PROCESSED INT O BLOCKS AND DRESSED BY THE ASSESSEE AND THESE WERE EXPORTED BUT STILL THEY WERE DESCRIBED AS ROUGH BLOCK OR CRUDE BLOCK IN SALES INVOICES, WHICH, ACCORDING TO THE ASSESSING OFFICER , IMPLIED THAT THE SAME HAD NOT BEEN POLISHED. THEREFORE, HE WAS OF THE OPINION THAT THE GRANITE IS POLISHED AFTER THEY ARE CUT INT O SLABS AND TILES AND NOT WHEN THEY ARE A BLOCK POLISHING RESULTS IN A SM OOTH END PRODUCT. BUT, UNDER SIMILAR CIRCUMSTANCES, THE ASSESSEE WAS ALLOWED THE BENEFIT OF SECTION 10B BY THE ITAT IN ASSESSMENT YE AR 2005-06, IN I.T.A.NO. 632/MDS/2009, VIDE ORDER DATED 13.8.2009 ON THE GROUND THAT THE ASSESSEE HAD EXPORTED POLISHED GRANITE. W HILE DOING SO, THE TRIBUNAL HAD OBSERVED THAT THE ASSESSEE EXTRACTS G RANITE BLOCKS FROM THE QUARRY, DRESSES THEM AND POLISHES THEM BEFORE E XPORTING. THE ASSESSING OFFICER TRIED TO DISTINGUISH THE FACTS OF THE YEAR 2005-06 BY OBSERVING THAT FROM THE SALES INVOICES IN THIS YEAR IT IS SEEN THAT THE GOODS EXPORTED ARE NOT POLISHED GRANITES. CONSEQUE NTLY, HE DENIED THE DEDUCTION U/S 10B IN THIS YEAR. AS AGAINST THI S, THE LD. CIT(A) HAS OBSERVED THAT THE FACTS OF THIS YEAR AS COMPARED TO THE FACTS FOR ASSESSMENT YEAR 2005-06 ARE EXACTLY IDENTICAL AND T HAT THE BUSINESS WAS IN CONTINUATION IN THE SAME FORM WITHOUT ANY DE VIATION OF ANY KIND AND THEREFORE, THE ASSESSEE IS ELIGIBLE FOR DEDUCTI ON U/S 10B. HE HAS I.T.A.NO.1442/13 :- 5 -: ALSO RELIED ON THE TRIBUNAL ORDER (SUPRA). NOW, T HE REVENUE HAS RAISED GROUND NOS. 2 TO 4 IN THIS REGARD BY SUBMITT ING THAT THE TRIBUNAL ORDER IN QUESTION HAS NOT BECOME FINAL AND THAT THE DEPARTMENT HAS NOT ACCEPTED THE SAME AND HENCE HAS PREFERRED APPEAL BEFORE THE HON'BLE HIGH COURT WHICH IS PENDI NG. IT WAS NOT THE CASE OF THE REVENUE THAT THE FACTS OF ASSESSMENT YE AR 2005-06 ARE DISTINGUISHABLE FROM THE FACTS OF THIS YEAR 2007-08 . A COPY OF THE TRIBUNAL ORDER DATED 30.8.2009 HAS BEEN PLACED BEFO RE US FOR OUR PERUSAL. 3. WE HAVE PERUSED THE TRIBUNAL ORDER AND HAVE C ONSIDERED THE ENTIRE FACTS AND EVIDENCE AVAILABLE BEFORE US. WE ARE IN AGREEMENT WITH THE LD. CIT(A) THAT THERE IS NO CHANGE IN THE BUSINESS OF THE ASSESSEE FROM EARLIER YEARS AND SIMILAR TYPE OF EXP ORT IS BEING DONE IN THIS YEAR TOO. THEREFORE, ASSESSEE BECOMES ENTITLE D TO DEDUCTION U/S 10B UNDER IDENTICAL FACTS AND CIRCUMSTANCES. THERE FORE, BY RESPECTFULLY FOLLOWING THE TRIBUNAL ORDER IN QUESTI ON, WE CONFIRM THE IMPUGNED FINDING AND DISMISS THE GROUNDS RAISED IN THIS RESPECT. IN VIEW THEREOF, WE FOLLOW THE ORDER OF THE TRIBU NAL FOR PREVIOUS ASSESSMENT YEAR AND HOLD THAT THE CIT(A) H AS RIGHTLY DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 8. THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON MONDAY, THE 30 TH OF DECEMBER, 2013, AT CHENNAI SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (S. S. GODARA) JUDICIAL MEMBER DATED: 30 TH DECEMBER,2013 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR