Deputy Commissioner of Income-Tax, Bangalore V. M/s.Saint Goban Crystals & Detectors India Ltd., Bangalore

ITA 1893/BANG/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 8943 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 10-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR
• Keywords: Opportunity of being heard
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 1893 / BANG/201 6 ASSESSMENT YEAR : 20 10 - 11 THE DCIT, CIRCLE 6 (1) (1), BANGALORE. VS. M/S. SAINT GOBAIN CRYSTALS & DETECTORS INDIA LTD., NO. 17/2, MARUTHI INDUSTRIAL ESTATE, HOODI RAGAPALYA, WHITEFIELD MAIN ROAD, BANGALORE 560 048. PAN: AAACB6794R APPELLANT RESPONDENT ASSESSEE BY : SHRI SHARATH RAO, CA REVENUE BY : DR. P.V. PRADEEP KUMAR, ADDL. CIT (DR) DATE OF HEARING : 04 . 10 .2018 DATE OF PRONOUNCEMENT : 12 . 10 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE REVENUE AND THE SAME IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), BANGALORE-6, BANGALORE DATED 03.08.2016 FOR ASSESSMENT YEAR 2010- 11. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER. 1. THE ORDER OF THE CIT (APPEALS) IS OPPOSED TO LAW AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, W HETHER THE CIT(A) WAS RIGHT IN HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 10B WITHOUT APPRECIATING THE FACT THAT THE TENURE OF CL AIM OF DEDUCTION EXPIRED IN A.Y. 2006-07. 3. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, W HETHER THE CIT(A) WAS RIGHT IN HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 10B WITHOUT APPRECIATING THE FACTTHAT THE JURISDICTIONA L ITAT HAS DISALLOWED THE CLAIM OF DEDUCTION FOR A.Y. 2008-09, VIDE ITS ORDER IN ITA NO.708/BANG/2013 DT. 11.05.2016. 4. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF ITA NO. 1893/BANG/2016 PAGE 2 OF 5 HEARING, IT IS HUMBLY PRAYED THAT THE ORDER OF THE CIT(A) IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVERSED AND TH AT OF THE ASSESSING OFFICER BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL. 3. THE REVENUE HAS ALSO RAISED THREE ADDITIONAL GRO UNDS WHICH ARE AS UNDER. 1. WHETHER THE ASSESSEE COMPANY HAS ESTABLISHED UNI T-II COMPLYING TO THE PROVISIONS OF SECTION 10B (2) IN THE LIGHT O F FACT THAT THE FIXED ASSETS SCHEDULE PROVE THE CONTRARY. 2. WHETHER THE ASSEMBLY ACTIVITIES CARRIED OUT AND HAS CLAIMED BY THE ASSESSEE COMPANY WHICH IS APPROVED BY THE DY. COMMI SSIONER, SPECIAL ECONOMIC ZONE (SEZ), CONSTITUTES MANUFACTUR E AND PRODUCTION AS CONTEMPLATED U/S1OB OF INCOME TAX ACT ? 3. WHETHER THE CLAIM OF THE ASSESSEE U/S 10B IS ADM ISSIBLE ON THE FINISH PRODUCT BEING RADIATION DETECTORS ON WHICH B ENEFICED U/S 10B HAS ALREADY BEEN UTILIZED 10 CONSEQUENCE YEARS. 4. AT THE VERY OUTSET, THE LD. DR OF REVENUE SUPPOR TED THE ASSESSMENT ORDER. HE ALSO SUBMITTED THAT FORM NO. 56G FOR UNIT I FORASSE SSMENT YEAR 2008-09 IS AVAILABLE ON PAGES 43 TO 56 OF PAPER BOOK AND IN PA RA NO. 5 OF ANNEXURE A TO THIS FORM, IT IS NOTED THAT THE ASSESSEE IS ENGA GED IN MANUFACTURE OF INSTRUMENTS AND APPARATUS FOR MEASURING AND DETECTI NG IONIZING RADIATORS AND THE DATE OF INITIAL REGISTRATION IS 11.08.1998 AND THE DATE OF COMMENCEMENT OF MANUFACTURE OR PRODUCTION IS 01.10.1996. THEREAFTE R HE SUBMITTED THAT SIMILAR FORM NO. 56G FOR UNIT II FOR ASSESSMENT YEAR 2008-0 9 IS AVAILABLE ON PAGES 57 TO 64 OF PAPER BOOK AND AS PER ANNEXURE-A TO THIS F ORM AVAILABLE ON PAGE NO. 58 OF PAPER BOOK, IT CAN BE SEEN THAT THE NATUR E OF ASSESSEES BUSINESS UNDERTAKINGS IS MANUFACTURE OF INSTRUMENTS AND APPA RATUS FOR MEASURING AND DETECTING IONIZING RADIATORS AND THE DATE OF INITIA L REGISTRATION IS 23.12.2003 AND THE DATE OF COMMENCEMENT OF MANUFACTURE OR PROD UCTION IS 10.06.2004. THEREAFTER HE SUBMITTED THAT FOR THE PRESENT YEAR I .E. ASSESSMENT YEAR 2010-11 FORM NO. 56G FOR UNIT II IS AVAILABLE ON PAGES 71 T O 76 OF PAPER BOOK AND AS PER ANNEXURE -A FOR THIS YEAR AVAILABLE ON PAGE NO. 72 OF PAPER BOOK, THE NATURE OF BUSINESS IS SAME AND DATE OF INITIAL REGISTRATIO N IS 23.12.2003 AND THE DATE OF COMMENCEMENT OF MANUFACTURE OR PRODUCTION IS 10.06. 2004. THEREAFTER HE SUBMITTED THAT SIMILAR ISSUE IS ALREADY DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE AS PER THE TRIBUNAL ORDER FOR ASSESSMENT Y EAR 2008-09 IN ITA NO. ITA NO. 1893/BANG/2016 PAGE 3 OF 5 708/BANG/2013 DATED 11.05.2016 OF WHICH HE SUBMITTE D A COPY ALONG WITH WRITTEN SUBMISSIONS AND POINTED OUT THAT AS PER PAG E NO. 14 OF THIS TRIBUNAL ORDER, IT WAS HELD THAT THE PERIOD OF 10 CONSECUTIV E YEARS SHOULD BE RECKONED FROM THE ASSESSMENT YEAR 1997-98 I.E. FROM THE YEAR OF COMMENCEMENT OF PRODUCTION OR MANUFACTURE OF AN ARTICLE OR THING UP TO THE ASSESSMENT YEAR 2006-07 AND SINCE IN THAT CASE, THE ASSESSMENT YEAR INVOLVED WAS ASSESSMENT YEAR 2008-09, THE ASSESSEE WAS NOT ELIGI BLE FOR DEDUCTION IN ASSESSMENT YEAR 2008-09. HE SUBMITTED THAT UNDER T HIS FACTUAL POSITION, THE ORDER OF CIT (A) SHOULD BE REVERSED AND THAT OF AO SHOULD BE RESTORED. 5. AS AGAINST THIS, LD. AR OF ASSESSEE SUPPORTED TH E ORDER OF CIT (A). HE ALSO SUBMITTED THAT THE JUDGEMENT OF HON'BLE KARNATAKA H IGH COURT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009-10 IS AVAILABLE O N PAGES 165 TO 170 OF PAPER BOOK IN ITA NO. 493 OF 2016 DATED 27.02.2018 AND IT WAS POINTED OUT THAT IN THIS YEAR, THIS DECISION OF HON'BLE KARNATA KA HIGH COURT IS ON BOTH ASPECTS AS TO WHETHER THE PERIOD OF 10 YEARS HAVE E XPIRED OR NOT AND WHETHER THE ASSESSEE IS MANUFACTURING OR PRODUCING ANYTHING OR NOT. IT WAS POINTED OUT THAT THE REVENUE HAS WITHDRAWN THE PRINCIPAL CONTEN TION REGARDING AVAILABILITY OF TENURE OF DEDUCTION OF 10 YEARS AND THIS ASPECT WAS GIVEN UP BECAUSE THE REVENUE HAD FILED AN APPLICATION IN M.P. NO. 128/BA NG/2016 SEEKING FOR RECTIFICATION OF IMPUGNED ORDER ON THE SAME ISSUE W HICH HAS BEEN REJECTED VIDE ORDER DATED 23.01.2017 NOTING THAT THE ASSESSING OF FICER HAD FOUND THAT THE ASSESSMENT YEAR 2009-2010 WAS THE 5TH ASSESSMENT YE AR, FOR WHICH, THE DEDUCTION UNDER SECTION 10B OF THE ACT WAS BEING CL AIMED, WHICH IS A FINDING OF FACT, WHICH HAS ATTAINED FINALITY. HE SUBMITTED TH AT IF ASSESSMENT YEAR 2009-10 IS 5 TH ASSESSMENT YEAR THEN ASSESSMENT YEAR 2010-11 IS 6 TH ASSESSMENT YEAR AND ON THIS ASPECT, THE REVENUE HAS NO CASE. THE S ECOND ASPECT IS AS TO WHETHER THE ASSESSEE IS ENGAGED IN THE PROCESS OF M ANUFACTURING AND THE PRODUCTION ALSO. IT WAS HELD BY THE HON'BLE KARNAT AKA HIGH COURT THAT THIS ISSUE WAS DECIDED BY THE TRIBUNAL IN ASSESSMENT YEA RS 2003-04 AND 2004-05 RESPECTIVELY IN FAVOUR OF THE ASSESSEE AND THIS HAS BEEN UPHELD BY HON'BLE KARNATAKA HIGH COURT IN ITA NO. 351/2009 C/W ITA NO .352/2009 BY AN ORDER DATED 19.01.2015 AND SINCE THE PROCESS OF MANUFACTU RE AND PRODUCTION ITA NO. 1893/BANG/2016 PAGE 4 OF 5 REMAINS SAME, THIS DECISION APPLY IN THE PRESENT YE AR I.E. ASSESSMENT YEAR 2009-10 WHICH WAS BEFORE HON'BLE KARNATAKA HIGH COU RT. HE SUBMITTED THAT THIS IS NOT CASE OF THE REVENUE THAT THERE IS ANY D IFFERENCE IN PRODUCT AND THEREFORE, ON THIS ISSUE ALSO, THE REVENUE HAS NO C ASE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT AS PER THE JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT IN ASSESSEES OWN C ASE FOR ASSESSMENT YEAR 2009-10, THIS WAS NOTED THAT ASSESSMENT YEAR 2009-1 0 WAS 5 TH ASSESSMENT YEAR FOR CLAIMING DEDUCTION U/S. 10B. AS PER FORM NO. 56G FOR THE PRESENT YEAR AVAILABLE ON PAGES 71 TO 76 OF PAPER BOOK, IT IS SEEN THAT THIS IS THE 6 TH YEAR AND THEREFORE, IT IS APPARENT THAT THIS IS THE SAME UNIT FOR WHICH IN ASSESSMENT YEAR 2009-10, THE ISSUE WAS DECIDED BY H ON'BLE KARNATAKA HIGH COURT IN FAVOUR OF THE ASSESSEE. ON THE SECOND ASP ECT, AS TO WHETHER THE ASSESSEE IS ENGAGED IN MANUFACTURE AND PRODUCTION O R NOT ALSO, THE ISSUE WAS DECIDED BY HON'BLE KARNATAKA HIGH COURT IN FAVOUR O F THE ASSESSEE IN ASSESSMENT YEARS 2003-04, 2004-05 AND 2009-10 ALSO. HOWEVER WE FIND THAT IN PARA NO. 4 OF THE ASSESSMENT ORDER FOR THE PRESE NT YEAR, THE AO HAS NOTED THAT THE ASSESSEE HAS STATED TO HAVE BEEN MANUFACTU RING AND EXPORTING INSTRUMENTS AND APPARATUS FOR MEASURING AND DETECTI NG IONIZING RADIATORS AND AS PER ANNEXURE-A TO FORM NO. 56G FOR THE PRESENT Y EAR AVAILABLE ON PAGE NO. 72 OF PAPER BOOK ALSO, IT IS STATED THAT THE NA TURE OF BUSINESS OF THE UNDERTAKING IS MANUFACTURE OF INSTRUMENTS AND APPAR ATUS FOR MEASURING AND DETECTING IONIZING RADIATORS BUT AS PER THE CERTIFI CATE DATED 17.04.2009 ISSUED BY COCHIN SPECIAL ECONOMIC ZONE (CSEZ) TO ASSESSEE, IT IS STATED THAT THE ITEMS OF MANUFACTURE IS ARRAYS & ARRAYS ASSEMBLY. HENCE IT HAS TO BE EXAMINED AND FOUND OUT AS TO WHETHER THE ASSESSEE I S HAVING EOU STATUS REGISTRATION FROM CSEZ IN RESPECT OF THOSE PRODUCTS FOR WHICH THE ASSESSEE IS CLAIMING DEDUCTION U/S. 10B OF IT ACT BECAUSE THE R EGISTRATION AVAILABLE ON PAGE NO. 81 OF PAPER BOOK IS FOR ARRAYS & ARRAYS AS SEMBLY BUT AS PER PAGE NO. 3 OF THE ASSESSMENT ORDER, THE ASSESSEE IS CLAIMING DEDUCTION IN THE PRESENT YEAR FOR MANUFACTURING AND EXPORTING INSTRUMENTS AN D APPARATUS FOR MEASURING AND DETECTING IONIZING RADIATORS. HENCE, FOR THIS LIMITED FACTUAL VERIFICATION, THE MATTER HAS TO GO BACK TO THE FILE OF AO AND THEREFO RE, WE SET ASIDE THE ORDER OF ITA NO. 1893/BANG/2016 PAGE 5 OF 5 CIT (A) AND RESTORE THE MATTER BACK TO THE FILE OF AO FOR FRESH DECISION IN THE LIGHT OF ABOVE DISCUSSION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DA TE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (SUNIL KUMAR YADAV) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 12 TH OCTOBER, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.