DCIT 9(1), MUMBAI V. BILL POWER LTD, MUMBAI

ITA 2414/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8517 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 26-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RUNA JHA TRIPATHI
• Assessee Lawyers: SANJAY BANSAL
• Section: 80IB

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI RAJENDRA SI NGH(AM) ITA NO.2414/M/2010 ASSESSMENT YEAR 2007-08 THE DCIT RANGE 9(1), R. NO.223 M/S. BILL POWER LIM ITED AAYAKAR BHAVAN, M.K. ROAD 201-204 VIKAS CHAMBERS MUMBAI 400 020. MITH CHOWKY, MARVE LINK ROAD MALAD(W), MUMBAI 400 064. PAN : AABCB1857G APPELLANT RESPONDENT REVENUE BY : SHRI RUNA JHA TRIPATHI ASSESSEE BY : SHRI SANJAY BANSAL O R D E R PER RAJENDRA SINGH (AM) THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORD ER DATED 25.1.2010 OF CIT(A) FOR THE ASSESSMENT YEAR 2007-08. THE REVENUE IN THIS APPEAL HAS RAISED DISPUTES ON THREE DIFFERENT GROUNDS. 2. THE DISPUTE RAISED IN GROUNDS NO.1 AND 2 RELATE TO CLAIM OF DEDUCTION UNDER SECTION 80IB IN RESPECT OF KARAD UNIT. THIS M ANUFACTURING UNIT WHICH WAS SET UP IN MARCH 2002 HAD BEEN CLAIMING DEDUCTION UN DER SECTION 80IB SINCE ASSESSMENT YEAR 2002-03. DURING ASSESSMENT YEAR 200 5-06 ONE OF THE UNITS AT AMLI WAS CLOSED AND SOME ITEMS OF THE MACHINERY WER E TRANSFERRED TO KARAD UNIT. THE AO DENIED DEDUCTION UNDER SECTION 80IB FO R ASSESSMENT YEAR 2005-06 2 ON THE GROUND THAT THE ASSESSEE HAD TRANSFERRED OLD MACHINERY FROM ONE OF ITS UNIT TO KARAD UNIT AND IT WAS HIT BY SECTION 80IB(2 ) READ WITH EXPLANATION 1 & 2. THE CLAIM WAS ALSO DENIED IN ASSESSMENT YEAR 200 6-07 FOLLOWING THE DECISION IN EARLIER YEAR. THE AO THEREFORE DENIED T HE CLAIM THIS YEAR ALSO. IN APPEAL THE ASSESSEE SUBMITTED THAT THE SAID MACHINE RIES WERE SHOWN AS UNINSTALLED MACHINERY IN THE BALANCE SHEET AND NO D EPRECIATION HAD BEEN CLAIMED AND THEREFORE THESE MACHINERIES WERE NOT UT ILIZED IN MANUFACTURING ACTIVITIES IN KARAD UNIT. CIT(A) ALSO NOTED THAT TH E TRIBUNAL IN ASSESSMENT YEAR 2005-06 AND 2006-07 HAD ALREADY ALLOWED THE CLAIM O F THE ASSESSEE. THEREFORE FOLLOWING THE DECISION OF THE TRIBUNAL CIT(A) ALLOW ED THE CLAIM AGGRIEVED BY WHICH THE REVENUE IS IN APPEAL. 2.1 BEFORE US THE LEARNED AR FOR THE ASSESSEE SUBMI TTED THAT THE ISSUE WAS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2005-06 IN ITA NO.5980/M/20 08 WHICH WAS FOLLOWED IN ASSESSMENT YEAR 2006-07 IN ITA NO.4718/M/2009. T HE LEARNED DR PLACED RELIANCE ON THE ORDER OF AO. 2.2 WE HAVE PERUSED THE RECORDS AND CONSIDERED THE MATTER CAREFULLY. THE DISPUTE IS REGARDING DENIAL OF CLAIM OF DEDUCTION U NDER SECTION 80IB ON THE GROUND THAT THE ASSESSEE HAD USED OLD MACHINERY TRA NSFERRED FROM AMLI UNIT. WE FIND THE SAME ISSUE HAD BEEN CONSIDERED BY THE T RIBUNAL IN THE ASSESSEES OWN CASE IN ASSESSMENT YEAR 2005-06 IN WHICH IDENTI CAL GROUND HAD BEEN RAISED. THE TRIBUNAL IN THAT YEAR REFERRED TO THE D ECISION OF THE D BENCH OF THE MUMBAI TRIBUNAL IN CASE OF ITO VS LAXMI PACKERS DAT ED 23.2.2007 IN WHICH IT WAS HELD THAT THE ASSESSEE COULD NOT USE ANY OLD MA CHINERY ONLY AT THE TIME OF COMMENCEMENT OF PRODUCTION IN THE NEW PLANT. ANY S UBSEQUENT USE OF 3 MACHINERY WHETHER OLD OR NEW DID NOT VITIATE THE CO NDITIONS SET OUT UNDER CLAUSE (III) OF SECTION 80IB(2). THE TRIBUNAL ACCOR DINGLY ALLOWED THE CLAIM OF THE ASSESSEE WHICH WAS FOLLOWED IN THE ASSESSMENT YEAR 2006-07 ALSO. FACTS THIS YEAR ARE IDENTICAL. THEREFORE RESPECTFULLY FOLLOWI NG THE DECISION OF THE TRIBUNAL IN EARLIER YEAR (SUPRA) WE SEE NO INFIRMITY IN THE ORDER OF CIT(A) ALLOWING THE CLAIM AND THE SAME IS THEREFORE ALLOWED. 3. THE DISPUTE RAISED IN GROUND NO.3 IS REGARDING C LAIM OF DEDUCTION UNDER SECTION 80IB IN RESPECT OF SCRAP SALE. THE LEARNED AR FOR THE ASSESSEE POINTED OUT THAT THE SAID GROUND DID NOT ARISE FROM THE ORD ER OF THE CIT(A) AND THEREFORE WAS NOT MAINTAINABLE. THE LEARNED DR PLAC ED RELIANCE ON THE ORDER OF AO. 3.1 WE HAVE PERUSED THE RECORDS AND CONSIDERED THE MATTER CAREFULLY. THE REVENUE HAS RAISED THE DISPUTE THAT CIT(A) HAD ERRE D IN DIRECTING THE AO TO ALLOW DEDUCTION UNDER SECTION 80IB IN RESPECT OF SA LE OF SCRAP BUT ON PERUSAL OF THE ORDER OF CIT(A) WE FIND THAT THE CIT(A) HAD NOT DIRECTED THE AO TO ALLOW DEDUCTION IN RESPECT OF SCRAP SALE UNDER SECTION 80 IB. THE GROUND RAISED BY THE REVENUE IS THEREFORE NOT MAINTAINABLE AND THE SAME IS DISMISSED AS INFRUCTUOUS. 4 4. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED . 5. THE DECISION WAS PRONOUNCED IN THE OPEN COURT 09 .02.2011. SD/- SD/- ( D.K. AGARWAL ) (RAJEN DRA SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 09.02.2011 AT :MUMBAI COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A), MUMBAI CONCERNED 4. THE CIT, MUMBAI CITY CONCERNED 5. THE DR I BENCH, ITAT, MUMBAI // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ALK