ACIT, Patna V. M/s Aishwarya Health Care, Patna

ITA 245/PAT/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9640 (ITAT-PATNA)
• Duration Of Justice: 3 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2017
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 03-12-2013
• Court: TRIBUNAL
• Department Lawyers: T VARKEY JUDIC IA L M EMBER
• Assessee Lawyers: ARCHANA SINHA SR S C SH
• Section: 143(3); 10; 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, PATNA BENCH:P ATNA BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 245/PAT/2013 ASSESSMENT YEAR:2009-10 ASSISTANT COMMISSIONER OF INCOME-TAX, CIRLE-4, PATNA / V/S . M/S.AISHWARYA HEALTH CARE, ASHOK RAJPATH, SULTANGANJ, PATNA-6. PAN: AAOFA1208J /APPELLANT .. /RESPONDENT /BY APPELLANT SMT. ARCHANA SINHA, SR. S.C /BY RESPONDENT SHRI A. K. RASTOGI & SHRI RAKESH KUMAR, ADVOCATES /DATE OF HEARING 06-04-2017 /DATE OF PRONOUNCEMENT 10-04-2017 /O R D E R PER BENCH: THIS APPEAL FILED BY THE ASSESSEE IS ARISING OUT OF ORDER OF COMMISSIONER OF INCOME- TAX(APPEAL), DHANBAD DATED 13-09-2013 FOR AY 2009- 10 PASSED U/S.154 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE SOLE GROUND OF APPEAL PREFERRED BY THE REVEN UE IS AGAINST THE ACTION OF THE LD. CIT(A) IN ALLOWING DEDUCTION/S.80IC OF THE ACT IN R ESPECT TO THIRD PARTY MANUFACTURING DONE BY THE ASSESSEE. 3. BRIEF FACTS OF THE CASE AS NOTED BY THE LD. CIT( A) IS THAT THE ORIGINAL APPELLATE ORDER U/S. 251 OF THE ACT WAS PASSED BY THE LD. CIT(A) VI DE ORDER DATED 26.10.2012 WHICH WAS CHALLENGED BY THE ASSESSEE BEFORE THE TRIBUNAL AND WHICH WAS DISPOSED OF BY ORDER DATED 09.07.2014 WHEREIN THE GROUNDS RAISED BY THE ASSESS EE HAVE BEEN ALLOWED. HOWEVER, IT WAS POINTED OUT THAT GROUND NOS. 1 AND 2 RAISED IN THAT APPEAL BEFORE THE TRIBUNAL WHEREIN THE ASSESSEE CHALLENGED THE IMPUGNED ACTION OF THE LD. CIT(A) WHO DID NOT ALLOW THIRD PARTY MANUFACTURING DONE BY IT U/S. 80IC OF THE ACT WAS D ISMISSED BY THE TRIBUNAL TAKING NOTE OF THE FACT THAT THE LD. CIT(A) BY THE IMPUGNED ORDER DATED 13.09.2013 U/S. 154 OF THE ACT HAS 2 ITA NO. 245/PAT/2013 AISHWARYA HEALTH CARE, AY 2009-10 GIVEN RELIEF TO THE ASSESSEE. HOWEVER, THE REVENUE BY THE INSTANT APPEAL HAS CHALLENGED THE ACTION OF THE CIT(A) WHO HAS GIVEN RELIEF TO THE AS SESSEE IN THE SECTION 154 APPLICATION MOVED BY THE ASSESSEE. 4. BY FILING THE APPLICATION U/S.154 OF THE ACT BEF ORE THE LD. CIT(A), AGAINST THE ORDER PASSED BY THE LD. CIT(A) ON 22.11.2012 THE ASSESSEE STATED THAT WHILE COMPUTING DEDUCTION ALLOWABLE U/S. 80IC OF THE ACT TO THE ASSESSEE, MAN UFACTURING SHOWN UNDER THE HEAD THIRD PARTY MANUFACTURE NEED TO BE CONSIDERED AS MANUFACTURING DONE BY THE ASSESSEE TH US IT QUALIFIED FOR DEDUCTION U/S. 80IC OF THE ACT. ACCO RDING TO THE ASSESSEE, THE MANUFACTURING THOUGH DONE FOR THE THIRD PARTY AS PER THEIR SPECIF ICATION, THE ENTIRE RAW MATERIAL, PACKING MATERIAL ETC. WERE PURCHASED EXCLUSIVELY BY THE ASS ESSEE AND IT MANUFACTURED THE PRODUCT AND FINISHED GOODS BY ITSELF AND THEREAFTER, SOLD T O THE THIRD PARTY ON THE INVOICE OF THE ASSESSEE AFTER STATUTORY LEVY SUCH AS VAT. IT WAS P OINTED OUT TO THE LD.CIT(A) THAT IN RESPECT OF JOB WORK CHARGES, THE ADMITTED FACT IS T HAT RAW MATERIAL HAS BEEN SUPPLIED BY SUCH CONCERNS FOR WHOM JOB WORK WAS EXECUTED BY THE ASSESSEE FOR WHICH SEPARATE CONSIDERATION WAS CLEARLY SHOWN IN THE BOOKS AND WH ICH IS NOT CLAIMED FOR DEDUCTION U/S. 80IC OF THE ACT. THE ASSESSEE DREW THE ATTENTION O F THE LD. CIT(A) TO THE ORDER PASSED BY THE JOINT COMMISSIONER OF INCOME-TAX IN PROCEEDINGS U/S. 144A OF THE ACT WHEREIN HE HAS OBSERVED AS UNDER: UPON REQUISITION BY THE ASSESSING OFFICER, THE AS SESSEE HAS FURNISHED PARTY WISE DETAILS OF SALES AND JOB WORK RECEIVED DURING THE YEAR. IT IS SEEN FROM THE DETAILS SO FILED THAT THE ASSESSEE IS MANUFACTURING AND SELLING THE PRODUCTS ON ITS OWN ACCOUNT AND IS ALSO MANUFACTURING THE PRODUCTS AS PER SPECIFICATION OF THIRD PARTY BY USING ITS OWN RAW MATERIAL, PACKING MATERIAL ETC. AND IS SELLING FINISHED PRODU CTS TO THE THIRD PARTIES ON CHARGING VAT . BESIDES THE ASSESSEE IS MANUFACTURING MEDICAL FORMU LATIONS ON LOAN LICENSE BASIS FOR OTHERS WHO ARE PROVIDING RAW MATERIAL AND PACKING MATERIAL AND IS CHARGING JOB WORK AGAINST SUCH MANUFACTURING. 5. THE LD. CIT(A) AFTER TAKING NOTE OF THE JCITS O RDER U/S. 144A OF THE ACT (SUPRA) AND AFTER PERUSAL OF THE PAPER BOOK FROM WHICH HE N OTED THAT HE HAS ERRONEOUSLY OBSERVED THAT THE THIRD PARTY MANUFACTURERS WERE SUPPLYING R AW MATERIALS TO THE ASSESSEE FOR PRODUCTION OF THEIR PRODUCT AND THEREAFTER REALIZIN G HIS MISTAKE WHICH WAS APPARENT FROM THE RECORDS, HE RECTIFIED THE SAME U/S. 154 OF THE ACT AND GAVE RELIEF TO THE ASSESSEE UNDER THE HEAD THIRD PARTY MANUFACTURE . AGGRIEVED, REVENUE IS BEFORE US. 3 ITA NO. 245/PAT/2013 AISHWARYA HEALTH CARE, AY 2009-10 6. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE TAKE NOTE THAT IN THE APPELLATE ORDER OF LD. CIT(A) DATED 26.10.2012 THE LD. CIT(A) HELD THAT MANUFACTURING BY THE ASSESSEE SHOW N UNDER THE HEAD THIRD PARTY MANUFACTURE WAS DONE BY THE ASSESSEE WITH THE RAW MATERIAL SUPPLIED BY SUCH THIRD PARTIES AND HELD THAT THE SAID INCOME WOULD NOT QUALIFY FOR DEDUCTION/S. 80IC OF THE ACT. THE ASSESSEE MOVED AN APPLICATION U/S. 154 OF THE ACT F OR RECTIFICATION OF THE MISTAKE WHICH HAS BEEN ALLOWED BY THE LD. CIT(A). WE NOTE THAT THE L D. CIT(A) HAS TAKEN NOTE OF THE JCITS ORDER U/S. 144A OF THE ACT (SUPRA) WHEREIN THE JCIT HAS CLEARLY MADE A FINDING THAT THE ASSESSEE IS ENGAGED IN THE MANUFACTURING AND SELLIN G OF THE PRODUCTS ON ITS OWN ACCOUNT AND IS ALSO MANUFACTURING THE PRODUCTS AS PER SPECIFICA TION OF THIRD PARTY BY USING ITS RAW MATERIAL, PACKING MATERIAL ETC. AND IS SELLING FINI SHED PRODUCTS TO THE THIRD PARTIES AFTER CHARGING VAT. THIS PARTICULAR FACT HAS BEEN RECONF IRMED BY THE LD. CIT(A) IN THE IMPUGNED 154A PROCEEDINGS FROM THE AO VIDE REPORT D ATED 16.05.2013 WHEREIN THE AO HAS CONFIRMED THE FINDING OF THE JCIT ON THIS ISSUE . FURTHER, THE LD. CIT(A) HAS ALSO TAKEN NOTE OF THE FACT THAT IN THE SUBSEQUENT ASSESSMENT YEAR I.E, AY 2010-11 THE AO HIMSELF HAS GIVEN DEDUCTION TO THE ASSESSEE FOR THIRD PARTY MAN UFACTURE IN THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT ON 30.03.2013. SINCE THE JC IT AND AO HAVE CONFIRMED THAT THE CLAIM MADE BY THE ASSESSEE UNDER THE HEAD THIRD PARTY MANUFACTURE WAS INDEED EXECUTED BY THE ASSESSEE AS PER THE SPECIFICATION OF THIRD PARTY, H OWEVER THE GOODS/PRODUCTS WERE MANUFACTURED BY THE ASSESSEE USING ITS OWN RAW MATE RIAL, PACKING MATERIAL ETC. AND HAS SOLD THE FINISHED PRODUCTS TO SUCH THIRD PARTIES AFTER C HARGING VAT AND FURTHER, WE NOTE THAT IN THE SUBSEQUENT ASSESSMENT YEAR 2010-11 THE AO HIMSE LF HAS ALLOWED THE CLAIM OF THE ASSESSEE IN RESPECT TO THIRD PARTY MANUFACTURE AND HELD IT AS QUALIFYING FOR 80IC DEDUCTION, SO, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSE D BY THE LD. CIT(A) AND, THEREFORE, DISMISS THE APPEAL OF THE REVENUE. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER IS PRONOUNCED IN OPEN COURT ON 10.04.2017 SD/- SD/- (WASEEM AHMED) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 10TH AP RIL, 2017 JD. SR. PS 4 ITA NO. 245/PAT/2013 AISHWARYA HEALTH CARE, AY 2009-10 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. ' / CONCERNED CIT 4. ' - / CIT (A) 5. # && , / DR, ITAT, PATNA 6. ( / GUARD FILE. BY ORD ER/ , ASSISTANT REGI STRAR, ITAT, PATNA,