DCIT, CHENNAI V. Sri Sakthi Cold Storage Pvt Ltd., CHENNAI

ITA 1818/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8104 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-11-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 10-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: A V SRIRAMAN
• Keywords: Reassessment proceedings
• Section: 143(3); 80IB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . . . , . , & BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NOS.1817 TO 1819/MDS/2015 ( / ASSESSMENT YEARS: 2002-03 TO 2004-05) DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-6(2), NEW BLOCK, AAYAKAR BHAVAN, 7 TH FLOOR, CHENNAI-34. VS M/S.SRI SAKTHI COLD STORAGE PVT. LTD., 6/9, NEHRU NAGAR III STREET ADAYAR, CHENNAI-600 020. PAN: AABCS2172H ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. A.V.SREEKANTH, JCIT /RESPONDENT BY : MR. A.V.SRIRAMAN, ADVOCATE /DATE OF HEARING : 27 TH NOVEMBER, 2015 /DATE OF PRONOUNCEMENT : 3 RD FEBRUARY, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM: THESE THREE APPEALS ARE FILED BY THE REVENUE AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-15, CHENNAI DATED 29.05.2015 I N ITA NO.217, 218 & 220/CIT(A)-15/13-14 PASSED UNDER SEC TION 143(3) R.W.S. 147 & 250 OF THE ACT. 2. THE ONLY COMMON ISSUE RAISED IN THESE THREE APP EALS BY THE REVENUE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BY DIRECTING THE ASSESSING OFF ICER TO ALLOW THE CLAIM OF THE ASSESSEE UNDER SECTION 80IB OF THE ACT 2 ITA NO.1817 TO 1819/MDS/2015 IN REGARD TO THE BUSINESS OF PROCESSING, STORING ( IN COLD STORAGE) AND SELLING SEA FOOD. 3. BRIEF FACTS ARE THAT THE ASSESSEE IS A SMALL SCA LE INDUSTRIAL UNDERTAKING ENGAGED IN THE BUSINESS OF P ROCESSING, STORING (IN COLD STORAGE) AND SELLING OF SEA FOODS , FILED ITS RETURNS OF INCOME CLAIMING DEDUCTION UNDER SECTION 80IB FOR ALL THE THREE YEARS. INITIALLY, THE RETURN WAS PRO CESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, ALL THE TH REE ASSESSMENTS WERE REOPENED. 4. DURING THE COURSE OF REASSESSMENT PROCEEDINGS, I T WAS OBSERVED BY THE LEARNED ASSESSING OFFICER THAT THE ASSESSEE WAS CARRYING ON THE BUSINESS OF PROCESSING AND SELL ING OF SEA FOODS. THE ASSESSEE EXPLAINED BEFORE THE LEARNED A SSESSING OFFICER THAT IT WAS ALSO OPERATING COLD STORAGE PLA NTS IN ORDER TO STORE THE PRODUCE PROCESSED BY THE ASSESSEE. HO WEVER, THE LEARNED ASSESSING OFFICER OPINED THAT THE ASSES SEE WAS NOT ENGAGED IN THE ACTIVITY OF MANUFACTURING/PRODUC TION OF ARTICLE OR THING WITHIN THE MEANING OF SECTION 80IB OF THE ACT NOR IT WAS ENGAGED IN THE ACTIVITY OF CARRYING ON T HE OPERATION 3 ITA NO.1817 TO 1819/MDS/2015 OF COLD STORAGE PLANT. FOR THE AFORESAID REASON, TH E LEARNED ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE IS NOT ENTITLED FOR THE DEDUCTION UNDER SECTION 80IB OF TH E ACT. 5. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) ALLOWED THE APPEAL OF THE ASSESSEE BY OB SERVING AS UNDER:- FROM THE READING OF THE PROVISIONS OF THE ACT, IT IS EVIDENT THAT ASSESSEES ENGAGED IN THE OPERATION OF ONE OR MORE COLD STORAGE PLANT OR PLANTS IN ANY PAR T OF INDIA IS ALSO ELIGIBLE FOR CLAIM OF DEDUCTION SUBJE CT TO FULFILMENT OF CERTAIN CONDITIONS. IN THIS CASE, THE APPELLANT STATED THAT THE A.Y 2004-05 WOULD BE THE 8 TH YEAR OF CLAIM OF DEDUCTION. FROM THE PERUSAL OF THE COPIES OF THE BILLS OR INVOICES, I FIND THAT THE AP PELLANT IS ENGAGED IN THE BUSINESS OF PRESERVATION, PROCESSING OF THE MARINE PRODUCTS. THE APPELLANT HA D INSTALLED VARIOUS MACHINERIES FOR PROCESSING OF THE SEA FOODS IN THE F.Y 31.03.1995. THE MARINE PRODUCTS EXPORT DEVELOPMENT AUTHORITY VIDE ITS LETT ER DATED 27.11.2006 RECOGNISED THE CLAIM OF THE APPELLANT THAT IT IS OPERATING COLD STORAGE PLANT. THE COPY OF THE AGREEMENT DATED 05.06.2000 ENTERED BY THE APPELLANT BEING MANUFACTURER OR PROCESSOR WITH M/S SRI SAKTHI MARINE PRODUCTS PVT. LTD., BEING EXPORTER EVIDENCES THE PROCESSING AND PACKING OF SEA FOODS OF THE EXPORTER AT MANUFACTURERS PLANT AT 35, KAZHIPATHUR VILLAGE, KANCHEEPURAM DISTRICT. THE MARINE PRODUCTS EXPORT DEVELOPMENT AUTHORITY GRANTED THE APPROVAL FOR PROCESSING OF THE SEA FOOD S VIDE REGISTRATION DATED 06.06.2002. THE RATIO OF TH E CASE LAWS CITED BY THE AR OF THE APPELLANT CLEARLY SUPPORT OF THE STAND OF THE APPELLANT. THE HON'BLE HIGH COURT OF ALLAHABAD IN THE CASE OF CIT VS AMARNATH SINGHAL REPORTED IN [2013] 38 AXMANN.COM 185(ALLAHABAD) HELD THAT THE OPERATION' OF THE COLD STORAGE PLANT OR PLANTS WOULD QUALIFY FOR DEDUCTION OF SEC.80-I(LA) WITH EFFECT FROM 01.04.1990. THE HON'B LE ITAT MUMBAI C BENCH IN THE CASE OF SUMARAJ SEA FOODS PVT. LTD. VS ITO REPORTED IN [2008] 112 ITD 177(MUM) HELD THAT THE PROFITS DERIVED FROM OPERATI ON 4 ITA NO.1817 TO 1819/MDS/2015 OF COLD STORAGE PLANT EITHER BY WAY OF STORAGE OF GOODS BELONGING TO OTHER CONCERNS OR FROM THE ACTIVITY OF ITS OWN GOODS FOR SALE WOULD BE ELIGIBLE FOR DEDUCTION U/S 80-IB(III) OF THE IT ACT. THE RATIO OF DECISION OF THE MADRAS HIGH COURT IN THE CASE OF CUT VS GEORGE MARIJO PVT. LTD. REPORTED IN 250 ITR 446 RELIED UPO N BY THE AR OF THE APPELLANT WAS IN RELATION TO CLAIM OF DEDUCTION U/S 80J OF THE IT ACT WAS IDENTICAL TO TH E SEC.80-IB(3), 80-IB(2)(III) OF THE IT ACT, 1961 AS STATED BY THE HON'BLE ITAT MUMBAI C BENCH IN THE CASE OF SUMARAJ SEA FOODS PVT. LTD. ON THE OTHER HAND, THE CASE LAWS CITED BY THE AO ARE NOT APPLICABLE TO THE FACTS OF THE CASE ON HAND. THE HON'BLE MUMBAI ITAT IN THE CASE OF SUMARAJ SEA FOODS PVT. LTD. HAD CONSIDERED THE DECISION OF SUPREME COURT IN THE CAS E OF CIT VS RELISH FOODS REPORTED IN 237 ITR 59 WHICH WAS RELIED UPON BY THE AO IN THE ORDER OF ASSESSMEN T. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND LEGAL POSITION, I AM FULLY IN AGREEMENT WI TH THE VIEW OF THE APPELLANT THAT ASSESSEE IS ELIGIBLE FOR CLAIM OF DEDUCTION UNDER THE SECOND LIMB TO THE SEC . 80-1B(2)(III) R.W.S 80-IB(3)(II) OF THE IT ACT. THE AO IS DIRECTED TO GRANT RELIEF U/S 80-IB OF THE IT ACT. 6. LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON TH E ORDERS OF THE LEARNED ASSESSING OFFICER WHILE AS LE ARNED AUTHORIZED REPRESENTATIVE ARGUED IN SUPPORT OF TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 7. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PER USED THE MATERIALS AVAILABLE ON RECORD. THE LEARNED COMM ISSIONER OF INCOME TAX (APPEALS) HAS ALLOWED THE CLAIM OF T HE ASSESSEE UNDER SECTION 80IB OF THE ACT BY FOLLOWING THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF SUMARAJ SEA FOODS PVT. LTD. (112 ITD 177), WHEREIN THE 5 ITA NO.1817 TO 1819/MDS/2015 TRIBUNAL WAS OF THE VIEW THAT THE PROFITS DERIVED FROM THE INDUSTRIAL UNDERTAKING HAVE A CLOSE AND PROXIMATE N EXUS WITH THE OPERATION OF ITS COLD STORAGE PLANT AND THUS IN TERMS OF SECTION 80-IB(3) OF THE ACT THE SAME WOULD BE ELIG IBLE PROFITS FOR GRANT OF DEDUCTION UNDER SECTION 80-IB(3). WHIL E DOING SO, THE TRIBUNAL HAD ALSO CONSIDERED THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELISH FOODS ( 237 ITR 59) WHICH WAS RELIED UPON BY THE LEARNED ASSESSING OFFICER. IN THESE CIRCUMSTANCES, WE FIND NO REASON TO INTERF ERE WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FOR ALLOWING THE CLAIM OF DEDUCTION TO TH E ASSESSEE UNDER SECTION 80IB OF THE ACT. 8. IN THE RESULT, ALL THE THREE APPEALS OF THE REVE NUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD FEBRUARY, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 3 RD FEBRUARY, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF .