The ITO,Vapi Ward-3, Vapi V. M/s. Ratnadeep Enterprise, Dadra

ITA 2069/AHD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0538 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-01-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 14-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Assessee Lawyers: S N DIVETIA
• Section: 143(3); 80IB; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD A BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI A.K. GARODIA , ACCOUNT ANT MEMBER INCOME-TAX OFFICER, VAPI WARD-3, VAPI (APPELLANT) VS . M/S. RATNADEEP ENTERPRISE PLOT NO. 5/1, SURVEY NO. 206/1 OPP. CHECK POST, DADRA PAN NO. AAGFR9626K (RESPONDENT) REVENUE BY : SRI RAHUL KUMAR, SR.D.R. ASSESSEE BY : SRI S.N.DIVETIA, A.R. DATE OF HEARING : 29-01-2013 DATE OF PRONOUNCEMENT : 15-03-2013 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- THESE ARE THE REVENUES APPEALS AGAINST THE ORDER OF LD. CIT(A) VALSAD DATED 28-06-2012. ITA NOS. 2069/AHD/2012 & 2070/AHD/2012 A.Y.:-2005-06 & 2006-07 I.T.A NO. 2069-2070/ADH/2012 A.Y. 2005-06 &2006-0 7 PAGE NO. ITO VS. M/S RATNADEEP ENTERPRISE 2 2. IN BOTH THE APPEALS OF THE REVENUE THE CONTROVER SY IS REGARDING ALLOWABILITY OF DEDUCTION U/S 80IB ON THE DISALLOWA NCE MADE BE ASSESSING OFFICER U/S 40(A)(IA) OF THE ACT. SINCE THE ISSUE INVOLVED IN BOTH THE APPEALS IS SAME, WE ARE DISPOSING OF THESE APPEALS OF THE R EVENUE BY PASSING A CONSOLIDATED ORDER BY TAKING THE FACTS FOR ASSESSME NT YEAR 2006-07. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME AT RS. NIL AFTER CLAIMING DE DUCTION U/S 80IB OF THE ACT @ 100 % AMOUNTING TO RS. 33,16,986/-. THIS RET URN WAS PROCESSED U/S 143(1) OF THE ACT WITHOUT ANY CHANGE TO THE INCOME RETURNED BY THE ASSESSEE. THEREAFTER CASE WAS SELECTED FOR SCRUTINY AND ASSES SMENT U/S 143(3) OF THE ACT WAS PASSED DETERMINING TOTAL INCOME AT RS. 600/ - WAS PASSED BY THE ASSESSING OFFICER. AFTERWARDS THE CASE WAS RE-OPEN ED U/S 147 OF THE ACT. WHILE COMPUTING THE ASSESSMENT U/S 143 R.W.S. 147 O F THE ACT, THE ASSESSING OFFICER DISALLOWED THE EXPENDITURE OF RS. 11,87,959 /- AND EXCLUDED THE SAME FROM THE PROFITS ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT AND DETERMINED THE TOTAL INCOME AT RS. 11,88,560/-. 4. BEFORE CIT(A) THE ASSESSEES CONTENTION WAS THAT THE CONTRACTUAL PAYMENTS WHICH WERE SUBJECT TO TDS DEDUCTION WERE P ART OF THE PROFIT AND LOSS ACCOUNT. THE EXPENDITURE INCURRED WAS FOR BUS INESS PURPOSE. THE ASSESSEE ITSELF DISALLOWED THESE EXPENSES WHILE COM PUTING THE TAXABLE INCOME. AS A RESULT OF WHICH GROSS TOTAL INCOME WA S INCREASED. IT WAS FURTHER SUBMITTED THAT PERUSAL OF THE WORDINGS OF S ECTION 80IB OF THE ACT REVEAL THAT THE DEDUCTION IS TO BE WORKED OUT AT PE RCENTAGE OF PROFITS AND GAINS DERIVED BY THE ASSESSEE IN BUSINESS WHICH IS ELIGIBLE FOR DEDUCTION U/S I.T.A NO. 2069-2070/ADH/2012 A.Y. 2005-06 &2006-0 7 PAGE NO. ITO VS. M/S RATNADEEP ENTERPRISE 3 80IB OF THE ACT. FOR MAKING THIS SUBMISSION RELIA NCE WAS PLACED UPON THE DECISION OF ITAT, CULCUTTA IN THE CASE OF ITO VS. M ILLENNIUM WRING PRODUCTS PVT LTD AND PRAYED THAT THE DISALLOWANCE M ADE BY THE AO MAY BE DELETED. LD. CIT(A) AGREED WITH THE SUBMISSION OF THE ASSESSEE AND PLACING RELIANCE ON THE DECISION OF HONBLE ITAT AHMEDABAD IN RAMESH INDUSTRIES VS. ITO, VAPI VIDE ORDER DATED 21-01-2011 IN ITA NO . 3131/AHD/2008 ADDITION MADE BY THE AO WAS DELETED BY HIM. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND THAT ISSUE IS NOW COVERED IN FAVOUR OF ASSESSEE AND AGAI NST THE REVENUE VIDE HONBLE JURISDICTIONAL HIGH COURT JUDGMENT IN THE C ASE OF ITO VS. KEVAL CONSTRUCTION IN TAX APPEAL NO. 443 DATED 10/12/2012 WHEREIN FOLLOWING WAS HELD:- HAVING HEARD COUNSEL ON BOTH THE QUESTION TODAY IN THIS APPEAL, WE FIND NO ERROR IN THE TRIBUNALS ULTIMATE CONCLUSION. EVEN IF A CERTAIN EXPENDITURE WHICH WAS INCURRED BY THE ASSESSEE FOR THE PURPOSE OF DEVELOPING HOUSING PROJECT WAS NOT ALLOWABLE BY VIR TUE OF SECTION 40(A)(IA) OF THE ACT, SINCE THE ASSESSEE HAD NOT DE DUCTED THE TAX AT SOURCE AS REQUIRED UNDER LAW, IT CANNOT BE DENIED T HAT SUCH DISALLOWANCE WOULD ULTIMATELY GO TO INCREASE THE AS SESSEES PROFIT FROM THE BUSINESS OF DEVELOPING HOUSING PROJECT. WHATEV ER BE THE ULTIMATE PROFIT OF ASSESSEE AS COMPUTED EVEN AFTER MAKING DI SALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT, WOULD QUALIFY FOR DED UCTION AS PROVIDED UNDER THE LAW. IN VIEW OF ABOVE, THE ORDER PASSED BY LD. CIT(A) IS HEREBY UPHELD. I.T.A NO. 2069-2070/ADH/2012 A.Y. 2005-06 &2006-0 7 PAGE NO. ITO VS. M/S RATNADEEP ENTERPRISE 4 6. IN THE RESULT, BOTH THE APPEAL OF REVENUE ARE DI SMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (A.K. GARODIA) ( D.K.TYAGI) ACCOUNTANT MEMBER J UDICIAL MEMBER AHMEDABAD : DATED15 /03/2013 AK / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '# STRENGTHENED PREPARATION & DELIVERY OF ORDERS IN TH E ITAT 1) DATE OF TAKING DICTATION 07-03-2013 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE N.A. 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 11-03-2013 4) DATE OF CORRECTION 11-03-2013 5) DATE OF FURTHER CORRECTION XXXX 6) DATE OF INITIAL SIGN BY MEMBERS 13-03-2013 7) ORDER UPLOADED ON 01-04-2013 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE YES 9) ORDER SENT TO BENCH CLERK 15-03-2013