GINI TEX P.LTD, MUMBAI V. ACIT 4(2), MUMBAI

ITA 187/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79237 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2009-2010
• Appeal Filed On: 07-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CAPT PRADEEP ARYA
• Section: 14A; 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G B ENCH, MUMBAI . , !'# $ $ $ $ , %& '()* , %+ ,- % # BEFORE SHRI D.MANMOHAN, VICE PRESIDENT AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ I.T.A. NO.187/MUM/2013 ( . . . . / ASSESSMENT YEAR: 2009-10 M/S. GINI TEX PVT. LTD., 413, JOGANI INDL. ESTATE, OPP. KASTURBA HOSPITAL, J.R. BORICHA MARG, LOWER PAREL(E), MUMBAI-400 011 / VS. THE ACIT, CIR.4(2), AAYAKAR BHAVAN, MUMBAI-400 020 -/ %+ ./ 0 ./ PAN/GIR NO. : AAACG 1274B ( /1 / APPELLANT ) .. ( 23/1 / RESPONDENT ) /1 4 % / APPELLANT BY: SHRI MAYUR KISNADWALA 23/1 5 4 % / RESPONDENT BY: CAPT. PRADEEP ARYA 5 6+ / DATE OF HEARING :17.06.2014 7. 5 6+ / DATE OF PRONOUNCEMENT :25.06.2014 ,%8 / O R D E R PER N.K. BILLAIYA, AM THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST T HE ORDER OOF THE LD. CIT(A)-8, MUMBAI DT. 25.10.2012 PERTAINING TO A .Y. 2009-10. 2. THE ASSESSEE HAS RAISED FOLLOWING TWO SUBSTANTIV E GROUNDS OF APPEAL: M/S. GINI TEX PVT. LTD., 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO ERRED IN HOLDING THAT THE INTEREST SUBSIDY, INTEREST ON FDR, SUNDRY BALANCES WRITTEN OFF AND MVAT WRITTEN OFF ARE NOT ELIGIBLE FOR DEDUCTION U/S . 80IB. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE AO ERRED IN DISALLOWING RS. 7,18,973/- U/S. 14A . 3. THE ASSESSEE IS IN THE BUSINESS OF MANUFACTURIN G OF YARN AND FABRICS. DURING THE COURSE OF THE SCRUTINY ASSESSME NT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLA IMED DEDUCTION U/S. 80IB AT RS. 24,89,226/-. THE AO FURTHER NOTICED TH AT THE ASSESSEE HAS RECEIVED INTEREST SUBSIDY OF RS. 14,27,164/- AND IN TEREST ON LATE PAYMENT/SCRAP SALES/BALANCE WRITTEN BACK AT RS. 4,4 4,894/-. DRAWING SUPPORT FROM THE DECISION OF THE HONBLE SUPREME CO URT IN THE CASE OF LIBERTY INDIA 183 TAXMAN 349, THE AO WAS OF THE FI RM BELIEF THAT THE AFOREMENTIONED AMOUNT ARE NOT ELIGIBLE FOR DEDUCTI ON U/S. 80IB OF THE ACT AND ACCORDINGLY RECOMPUTED THE DEDUCTION U/S.80 IB AT RS. 6,17,168/-/ 4. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATT ER BEFORE THE LD. CIT(A). THE LD. CIT(A) ALLOWED THE RELIEF IN SO FA R AS CLAIM OF DEDUCTION IN RESPECT OF RECEIPTS RELATING TO SCRAP SALE AND INTEREST FROM CUSTOMERS ARE CONCERNED AND DECLINE TO ALLOW DEDUCT ION U/S. 80IB IN RESPECT OF INCOME FROM INTEREST SUBSIDY, INTEREST O N FDR, SUNDRY BALANCES WRITTEN OFF AND MVAT WRITTEN OFF. 5. AGGRIEVED BY THIS, ASSESSEE IS BEFORE US. IN SO FAR AS CLAIM OF INTEREST SUBSIDY IS CONCERNED, THIS ISSUE HAS BEEN DISCUSSED BY US AT LENGTH IN ITA NO. 2203/M/11 FOR A.Y. 2005-06. FOLLOWING O UR OWN DECISION, WE DIRECT THE AO TO ALLOW DEDUCTION U/S. 80IB IN TH IS RESPECT. M/S. GINI TEX PVT. LTD., 3 6. BEFORE US, THE ASSESSEE HAS GIVEN BIFURCATION OF OTHER INCOME ON WHICH 80IB DEDUCTION HAS BEEN CLAIMED WHICH IS AS U NDER: S. NO. PARTICULARS AMOUNT 1 INTEREST ON FDR 83,503 2. INTEREST ON LATE PAYMENT 2,50,730 3. SCRAP SALE 60,374 4. SUNDRY BALANCES WRITTEN OFF (70,816) 5. MVAT REFUND 1,21,103 7. WE ARE CONCERNED ONLY WITH ITEM NO. 1 & 5. BEFO RE US THE LD. COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THE DECISION OF THE TRIBUNAL IN THE CASE OF MILI STEELS PVT. LTD. IN ITA NOS. 2494/M/2009 AND 3209/M/2009 AND POINTED OUT THAT SALES TAX REFU ND HAS BEEN CONSIDERED TO BE ELIGIBLE FOR DEDUCTION U/S. 80IB O F THE ACT. 8. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT BR ING ANY DISTINGUISHING DECISION. 9. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW AND THE DECISION OF THE TRIBUNAL BROUGHT TO OUR NOTICE BY THE LD. COUNSEL. WE FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL. THE TRIBUNAL AFTER CONSIDERING THE DECISION OF THE HONBLE SUPREME COU RT IN THE CASE OF LIBERTY INDIA (SUPRA) HAS ALLOWED THE CLAIM OF DEDU CTION U/S. 80IB OF THE ACT IN RESPECT OF SALES TAX REFUND. WE, ACCORDINGL Y DIRECT THE AO TO ALLOW THE CLAIM OF DEDUCTION IN RESPECT OF MVAT REF UND. HOWEVER, IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME CO URT IN THE CASE OF M/S. GINI TEX PVT. LTD., 4 LIBERTY INDIA (SUPRA), IN OUR CONSIDERED VIEW, INTE REST ON FDR AMOUNTING TO RS. 83,503/- IS NOT ELIGIBLE FOR DEDUCTION U/S. 80IB OF THE ACT. 10. IN SO FAR AS SUNDRY BALANCES WRITTEN OFF IS CON CERNED, WE FIND THAT IT IS A DEBIT BALANCE, HENCE NOT ELIGIBLE FOR DEDUCTIO N U/S. 80IB OF THE ACT. GROUND NO. 1 IS PARTLY ALLOWED. 11. GROUND NO. 2 RELATES TO THE DISALLOWANCE U/S14A AMOUNTING TO RS. 7,18,973/-. 12. A PERUSAL OF THE ORDERS OF THE LOWER AUTHORITIE S SHOWS THAT THE AO HAS COMPUTED THE DISALLOWANCE BY INVOKING PROVISION S OF SEC. 14A READ WITH RULE 8D OF THE ACT WHICH IS IN LINE WITH THE D ECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GODREJ & B OYCE MANUFACTURING CO. LTD. VS DCIT 328 ITR 81. THUS, THERE BEING NO E RROR, NO INTERFERENCE IS CALLED FOR. GROUND NO. 2 IS ACCORDINGLY DISMISS ED. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JUNE, 2014 . ,%8 5 . +% 9 :, ; 25.6.2014 5 < SD/- SD/- (D.MANMOHAN ) (N.K. BILLAIYA) !'# /VICE PRESIDENT %+ ,- / ACCOUNTANT MEMBER MUMBAI; :, DATED 25.6.2014 . . ./ RJ , SR. PS M/S. GINI TEX PVT. LTD., 5 ,%8 ,%8 ,%8 ,%8 5 55 5 26' 26' 26' 26' =%'.6 =%'.6 =%'.6 =%'.6 / COPY OF THE ORDER FORWARDED TO : 1. /1 / THE APPELLANT 2. 23/1 / THE RESPONDENT. 3. > ( ) / THE CIT(A)- 4. > / CIT 5. '?< 26 , , / DR, ITAT, MUMBAI 6. < @ / GUARD FILE. ,%8 ,%8 ,%8 ,%8 / BY ORDER, 3'6 26 //TRUE COPY// ! !! ! / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI