Ford Motor Private Limited, CHENNAI V. DCIT, CHENNAI

ITA 1519/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4342 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-04-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 27-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R VENKATESAN
• Keywords: Reopening of assessment; Tangible material; Difference of opinion; Change of opinion
• Section: 143(3); 10AA; 10B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI . . . , '.. % , * BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.1519/MDS/2016 + + /ASSESSMENT YEAR: 2007-08 M/S.FORD MOTOR PVT. LTD., (FORMERLY KNOWN A FORD BUSINESS SERVICES CENTRE PVT. LTD.), BLOCK NO.1B, RMZ MILLINIA, NO.143, DR.MGR ROAD, (NORTH VEERANAM SALAI), PERUNGUDI, CHENNAI-603 204. VS. THE DY. COMMISSIONER OF INCOME TAX, COMPANY CIRCLE- 2(1), AAYAKAR BHAVAN, 121 NUNGAMBAKKAM HIGH ROAD, CHENNAI-600 034. [PAN: AAACF 5984 H ] ( . /APPELLANT) ( /0. /RESPONDENT) . 1 / APPELLANT BY : MR.R.VENKATESAN, CA /0. 1 /RESPONDENT BY : MR.SASIKUMAR, JCIT 1 /DATE OF HEARING : 18.04.2017 1 /DATE OF PRONOUNCEMENT : 08.06.2017 / O R D E R PER D.S.SUNDER SINGH , ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER DATED 21.03.2016 OF COMMISSIONER OF INCOME TAX (APPEALS)- 6, CHENNAI, IN ITA ITA NO.1519/MDS/2016 :- 2 -: NO.246/CIT(A)-6/2014-15 FOR THE AY 2007-08 AND RAI SED THE FOLLOWING GROUNDS: 1.GENERAL THE GROUNDS OF APPEAL LISTED BELOW ARE WITHOUT PREJ UDICE TO EACH OTHER: 1.1 THAT THE ORDER PASSED BY THE LEARNED COMMISSION ER OF INCOME-TAX (APPEALS) [CIT(A)J IS CONTRARY TO LAW, FACTS AND CIRCUMSTANCES OF THE CASE. 2. REOPENING OF ASSESSMENT IS BAD IN LAW 2.1 THE ORDER OF THE LEARNED CIT(A) IS BAD IN LAW AS THE LEARNED CIT(A) FAILED TO APPRECIATE THAT NO INCOME HAS ESCAPED ASSESSMENT BY REASON OF FAILURE OF THE APPELLANT TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS DURING THE COURS E OF ORIGINAL ASSESSMENT. 2.2 THE ORDER OF LEARNED CIT(A) IS ERRONEOUS AS THE LEARNED CIT(A) FAILED TO APPRECIATE THAT RE-OPENING OF ASSESSMENT DOES NOT EMANATE FROM FRES H OR ADDITIONAL TANGIBLE MATERIAL THAT HAD NOT BEEN AVAILABLE AT THE TIME OF ORIGINAL ASSE SSMENT. 2.3 THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS BY FAILING TO APPRECIATE THAT THE RE- OPENING OF ASSESSMENT IS MERELY BASED ON THE CHANGE OF OPINION OF LEARNED DEPUTY COMMISSIONER OF INCOME-TAX (AO) AND THE SAME DOES N OT EMANATE FROM ANY ADDITIONAL INFORMATION OR MATERIAL ON RECORD. 3. SET OFF OF LOSSES WHILE COMPUTING DEDUCTION UNDE R SECTION 10A OF THE ACT 3.1 THE LEARNED CIT(A) HAS ERRED IN FACTS AND CIRCUM STANCES OF THE CASE BY CONFIRMING THE DECISION OF AO IN RELATION TO SETTING OFF THE LOSSE S OF THE NEW UNIT AGAINST THE INCOME OF THE FITSI DIVISIONS BEFORE ALLOWING THE BENEFIT UNDER S ECTION 10A OF THE ACT. 3.2 THE LEARNED CIT(A) ERRED IN LAW BY CONFIRMING TH E AOS RELIANCE ON THE CBDT CIRCULAR NO.7 DATED 16 JULY 2013 WITHOUT APPRECIATING THAT T HE SAME IS NOT BINDING ON THE APPELLANT IN VIEW OF THE PRINCIPLE ESTABLISHED BY VARIOUS JUD ICIAL PRECEDENTS. 4. OTHERS 4.1 THE APPELLANT PRAYS THAT DIRECTIONS BE GIVEN TO GRANT ALL SUCH RELIEF ARISING FROM THE GROUNDS OF APPEAL MENTIONED SUPRA AS ALSO ALL CONSE QUENTIAL RELIEF THERETO. 4.2 THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR WITHDRAW ANY OF THE ABOVE GROUNDS OF APPEAL AND TO SUBMIT SUCH STATEMENTS, DO CUMENTS AND PAPERS AS MAY BE CONSIDERED NECESSARY EITHER AT OR BEFORE THE HEARIN G OF THIS APPEAL AS PER LAW. 2.0 THE ASSESSEE RAISED TOTAL FOUR GROUNDS IN THIS APPE AL AND GROUND NOS.1 & 4 ARE GENERAL IN NATURE WHICH DOES NOT REQU IRE SPECIFIC ADJUDICATION. ITA NO.1519/MDS/2016 :- 3 -: 3.0 GROUND NO.2 IS WITH REGARD TO RE-OPENING OF ASSESS MENT WHICH WAS NOT ARGUED BY THE ASSESSEE. THEREFORE, THIS GROUND IS DISMISSED AS NOT PRESSED. 4.0 GROUND NO.3 IS RELATED TO THE SET OFF BUSINESS LOS SES AGAINST THE INCOME OF THE FITSI DIVISION BEFORE ALLOWING THE BE NEFIT U/S.10A OF THE IT ACT. THE ASSESSEE HAS INCURRED A LOSS OF RS.64,38, 865/- ON ACCOUNT OF EXPENSES INCURRED IN 10AA UNIT. THE ASSESSEE HAS RE DUCED THE LOSS AFTER CLAIMING THE DEDUCTIONS UNDER SECTION 10A AND B. TH E ASSESSEE HAS CLAIMED THE SET OF LOSSES OF RS.64,38,865/- FROM TH E TOTAL INCOME INSTEAD OF CARRYING FORWARD OF THE LOSSES HOLDING THE UNIT ELIGIBLE FOR DEDUCTION U/S.10AA, AS A SEPARATE INDEPENDENT UNIT. THEREFORE THE AO COMPLETED THE REASSESSMENT U/S 143(3) R.W.S 147 RE-COMPUTING THE TOTAL INCOME AND ALLOWED THE LOSS BEFORE THE DEDUCTION U/S.10A & B 5.0 THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) CONFIRMED THE ORDER OF THE AO AND DISMISSED THE APP EAL OF THE ASSESSEE. 6.0 AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSES SEE IS ON APPEAL BEFORE US AND ARGUED THAT THE STAGE OF DEDUCTION U/ S.10A SUBSEQUENT TO AMENDMENT TO FINANCE ACT 2000 W.E.F. 01.04.2001 WO ULD BE WHILE COMPUTING GROSS TOTAL INCOME OF ELIGIBLE UNDERTAKIN G UNDER CHAPTER-IV OF ACT AND NOT AT STAGE OF COMPUTATION OF TOTAL INCOME UNDER CHAPTER-VI OF IT ACT. ASSESSEE ALSO RELIED ON THE DECISION OF TH E HONBLE APEX COURT IN ITA NO.1519/MDS/2016 :- 4 -: THE CASE OF CIT V. YOKOGOWA LTD., 77 TAXMANN 41 WHE REIN THE HONBLE APEX COURT HELD THAT THE DEDUCTION WOULD BE WHILE C OMPUTING GROSS TOTAL INCOME OF ELIGIBLE UNDERTAKING UNDER CHAPTER-IV OF ACT AND NOT AT THE STAGE OF COMPUTATION OF TOTAL INCOME. THE PROVISIO NS OF SEC.10A, 10B & 10AA BEING PARI-METERIA WE HOLD THAT THE JUDGMENT O F THE HONBLE APEX COURT IS SQUARELY APPLICABLE IN THE ASSESSEES CASE AND ACCORDINGLY, WE SET-ASIDE THE ORDER OF THE LOWER AUTHORITIES AND AL LOW THE APPEAL OF THE ASSESSEE. 7.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 08, 201 7, AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ' . . % ) (D.S.SUNDER SINGH) /ACCOUNTANT MEMBER /CHENNAI, 6 /DATED: JUNE 08, 2017. TLN 1 /%7 87 /COPY TO: 1. . /APPELLANT 4. 9 /CIT 2. /0. /RESPONDENT 5. 7 / /DR 3. 9 ( ) /CIT(A) 6. + /GF