The Dy. CIT, Cicle-1(3), Vadodara V. M/s. Fine Line Circuits Company, Vadodara

ITA 2188/AHD/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5069 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 23-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K DAVE
• Assessee Lawyers: SHANKET BAKSHI
• Keywords: Tax effect
• Section: 10B

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR ./ I.T.A. NO. 2188/AHD/2015 ( ASSESSMENT YEAR : 2009-10) THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE-1(3), 3 RD FLOOR, ROOM NO.302, AAYKAR BHAVAN, RACE COURSE CIRCLE, VADODARA - 390007 / VS. M/S. FINELINE CIRCUITS COMPANY, PLOT NO. E-8, GIDC, MANJUSAR, SAVLI 391770, DIST: VADODARA ( APPELLANT ) .. ( / RESPONDENT ) & ./ I.T.A. NO. 3250/AHD/2015 ( ASSESSMENT YEAR : 2011-12) M/S. FINELINE CIRCUITS COMPANY, PLOT NO. E/8, GIDC, MANJUSAR, SAVLI, VADODARA 391770 / VS. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE- 3, AAYKAR BHAVAN, RACE COURSE CIRCLE, VADODARA - 390007 ./ ./ PAN/GIR NO. : AAAFF6253A ( APPELLANT ) .. ( / RESPONDENT ) REVENUE BY : SHRI S. K. DAVE, SR. D.R. ASSESSEE BY : SHRI SHANKET BAKSHI, A.R. DATE OF HEARING 30/07/2018 !' / DATE OF PRONOUNCEMENT 09/08/2018 / O R D E R ITA NOS. 2188 & 3250/AHD/15 [FINELINE CIRCUITS CO.] A.YS. 2009-10 & 2011-12 - 2 - PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEALS HAVE BEEN FILED AT THE INSTAN CE OF THE REVENUE AGAINST THE ORDER OF THE CIT(A)-5, VADODARA (CIT(A) IN SHORT), DATED 10.04.2015 ARISING IN THE PENALTY ORD ER DATED 14.03.2014 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 271(1 )(C) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING ASSESSMENT YEAR 2009-10. SIMILARLY, THE ASSESSEE HAS ALSO FILED THE APPEAL A GAINST THE ORDER OF THE CIT(A)-4, VADODARA DATED 21.08.2015 ARISING IN THE ASSESSMENT ORDER DATED 10.03.2014 PASSED BY THE AO UNDER S.143 (3) OF THE ACT CONCERNING AY 2011-12. 2. WE FIRST ADVERT TO THE REVENUES APPEAL IN ITA NO.2188/AHD/2015 CONCERNING AY 2009-10. 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED AR FOR THE ASSESSEE CONFRONTED THE REVENUE WITH EFFECT THAT TH E GROUND OF THE REVENUES APPEAL CHALLENGES CLAIM OF DEDUCTION UNDE R S.10B ON SALE OF CCGL SHEETS TO ANOTHER EOU UNITS SITUATED WITHIN INDIA AND THUS NOT ELIGIBLE FOR DEDUCTION UNDER S.10B OF THE ACT. THE PENALTY ATTRIBUTABLE TO THE AFORESAID ISSUE IS MERELY RS.2, 25,308/- OUT OF TOTAL PENALTY OF RS.25,78,975/-. THE LEARNED AR ACCORDIN GLY POINTED OUT THAT THE REVENUES APPEAL IS LIABLE TO BE STRUCK DO WN IN VIEW OF THE CBDT CIRCULAR NO.3 OF 2018 DATED 11/07/2018. AS PE R AFORESAID CIRCULAR, ALL PENDING APPEALS FILED BY REVENUE ARE LIABLE TO BE DISMISSED AS A MEASURE FOR REDUCING LITIGATION WHER E THE TAX EFFECT DOES NOT EXCEED THE PRESCRIBED MONETARY LIMIT WHICH IS NOW REVISED AT RS.20 LAKHS. IN THE INSTANT CASE, THE TAX EFFECT O N THE DISPUTED ISSUES RAISED BY THE REVENUE IS STATED TO BE NOT EXCEEDING RS.20 LAKHS AND THEREFORE APPEAL OF THE REVENUE IS REQUIRED TO BE D ISMISSED IN LIMINE . ITA NOS. 2188 & 3250/AHD/15 [FINELINE CIRCUITS CO.] A.YS. 2009-10 & 2011-12 - 3 - 4. LEARNED DR SUBMITTED THAT A LIBERTY SHOULD BE GR ANTED TO THE REVENUE FOR RESTORATION OF APPEAL IN THE EVENT OF S HOWING INAPPLICABILITY OF THE AFORESAID CIRCULAR IN ANY MA NNER. THUS, IT WILL BE OPEN TO THE REVENUE TO SEEK RESTORATION OF ITS A PPEAL ON SHOWING INAPPLICABILITY OF THE AFORESAID CBDT CIRCULAR IN A NY MANNER. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 6. WE SHALL NOW ADVERT TO ASSESSEES APPEAL ITA NO. 3250/AHD/2015 CONCERNING AY 2011-12. 7. THE SUBSTANTIVE GROUNDS OF APPEAL RAISED BY THE ASSESSEE READS AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) - 4, VADODARA ['THE CIT(A)'] ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION O F THE ASSISTANT COMMISSIONER OF LNCOME TAX, CIRCLE-3, BARODA('THE AO')IN DISALLOWIN G PAYMENT OF RS.64,7647- INVOKING SECTION 40(A)(I) OF THE INCOME TAX ACT, 19 61 ('THE ACT'). 2. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN C ONFIRMING THE ACTION OF THE AO IN HOLDING THAT THE ABOVE PAYMENT MADE BY THE APPELLAN T IS SUBJECT TO WITHHOLDING TAX U/S. 195 OF THE ACT DESPITE THE FACT THAT NO TAX IS REQUIRED TO BE WITHHELD. 3. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN C ONFIRMING THE ACTION OF THE AO IN DISALLOWING DEDUCTION U/S.L0B OF THE ACT ON SALES O F RS. 1,98,25,369/- BEING SALES MADE TO SEZ/EOU UNITS ON THE GROUND THAT THE SALE P ROCEEDS IN RESPECT THEREOF HAVE BEEN RECEIVED IN INDIAN RUPEES. 4. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN C ONFIRMING THE ACTION OF THE AO IN REDUCING THE CLAIM OF DEDUCTION U/S. 10B FROM RS.2, 51,94,410/- TO RS.2,15,10,398/-. 8. IN THE COURSE OF HEARING, THE LEARNED AR FOR THE ASSESSEE FAIRLY SUBMITTED THAT HE DOES NOT INTEND TO PRESS GROUND N O.1 AND 2 OF THE ASSESSEES APPEAL. CONSEQUENTLY, GROUND NOS. 1 & 2 OF THE ASSESSEES APPEAL ARE DISMISSED. 9. AS REGARDS GROUND NOS. 3 & 4 OF THE ASSESSEES A PPEAL , THE LEARNED AR FOR THE ASSESSEE FAIRLY SUBMITTED THAT T HE ISSUE ARISING HEREIN IN THESE GROUNDS STANDS CONCLUDED AGAINST TH E ASSESSEE AND IN ITA NOS. 2188 & 3250/AHD/15 [FINELINE CIRCUITS CO.] A.YS. 2009-10 & 2011-12 - 4 - FAVOUR OF THE REVENUE BY THE DECISION OF THE TRIBUN AL CONCERNING AY 2004-05 AND OTHERS IN ITS OWN CASE IN ITA NO. 1144/ AHD/2008 DATED 15 TH APRIL, 2011. 10. IN VIEW OF THIS AVERMENT ON BEHALF OF THE ASSES SEE AND ALSO IN LIGHT OF THE DECISION OF THE CO-ORDINATE BENCH IN A SSESSEES OWN CASE PERTAINING TO EARLIER ASSESSMENT YEAR, GROUND NOS.3 & 4 OF THE ASSESSEES APPEAL ARE ALSO DISMISSED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. 12. IN THE COMBINED RESULT, THE APPEALS OF THE REVE NUE AND ASSESSEE BOTH ARE DISMISSED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 09/08/2018 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- %. / REVENUE 2. / ASSESSEE '. ()* + / CONCERNED CIT 4. +- / CIT (A) .. /01 22)*3 )*'3 45( / DR, ITAT, AHMEDABAD 6. 178 / GUARD FILE. BY ORDER / 3 /4 )*'3 45( THIS ORDER PRONOUNCED IN OPEN COURT ON 09/08/201 8