DCIT CIR 3(1), MUMBAI V. CEASEFIRE INDUSTRIES LTD, MUMBAI

ITA 2601/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79323 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 05-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIKANT NAMDEO
• Section: 143(3); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO.2601/M/2013 ( AY: 2009 - 2010) DCIT - CIR 3(1), R.NO.607, AAYAKAR BHAVAN, MUMBAI - 400020. / VS. CEASEFIRE INDUSTRIES LTD, 608, DOLI CHAMBERS, ARTHUR BUNDER ROAD, COLABA, MUMBAI - 05. ./ PAN : AABCC8940P ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SHRIKANT NAMDEO / RESPONDENT BY : SHRI HARESH P SHAH / DATE OF HEARING : 09.7.2014 / DATE OF PRONOUNCEMENT :16 .7.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 5.4.2013 IS AGAINST THE ORDER OF THE CIT (A) - 6, MUMBAI DATED 10.1.2013 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUND WHICH READS AS UNDER: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD CIT (A) WAS JUSTIFIED IN HOLDING THAT THE INCOME IN RESPECT OF DELIVERY CHARGES RECEIVED BE INCLUDED IN THE ELIGIBLE PROFITS WHILE COMPUTING DEDUCTION U/S 80IC OF THE ACT , WITHOUT APPRECIATING THE FACT THAT THE INCOME FROM DELIVE RY CHARGES IS NOT THE PROFITS AND GAINS DERIVED FROM BUSINESS BY THE UNDERTAKING ELIGIBLE FOR DEDUCTION U/S 80IC. 3. THE ISSUE INVOLVED IN THIS APPEAL IS WHETHER THE INCOME IN RESPECT OF DELIVERY CHARGES RECEIVED BE INCLUDED IN THE ELIGIBLE PROFITS WHILE COMPUTING DEDUCTION U/S 80IC . BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING AND MANUFACTURING OF FIRE EXTINGUISHERS AND FIRE SAFETY EQUIPMENTS. ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL IN COME AT RS. NIL. ASSESSMENT WAS 2 COMPLETED U/S 143(3) OF THE ACT BY MAKING CERTAIN ADDITIONS. DURING THE ASSESSMENT PROCEEDINGS, AO NOTICED THAT THE ASSESSEE HAD THE TURNOVER OF GOODS MANUFACTURED BY IT AS WELL AS THE TRADED GOODS. THE SELLING ARRANGEMEN T FOR BOTH THE GOODS WAS COMMON DUE TO WHICH THE ASSESSEE ADOPTED THE TURNOVER METHOD TO ARRIVE AT THE PROFIT ELIGIBLE FOR DEDUCTION U/S 80IC OF THE ACT. EVEN THOUGH, THE SAID METHOD WAS ACCEPTED BY THE AO, THE ASSESSEES SUBMISSIONS FOR THE RECOVERY OF DELIVER CHARGES WERE NOT ACCEPTED BY HIM AND ACCORDINGLY, THE ASSESSEES CLAIM OF DEDUCTION U/S 80IC WAS DISALLOWED BY THE AO. MATTER TRAVELLED TO THE CIT (A). 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE, CIT (A) ALLOWED THE APPEAL OF THE ASSESSEE BY FOLLOWING THE EARLIER YEARS ORDERS OF THE REVENUE AUTHORITIES ON SIMILAR ISSUE. AGGRIEVED, REVENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUND. 5. DURING THE P ROCEEDINGS BEFORE US, AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT AN IDENTICAL ISSUE WAS CAME UP FOR ADJUDICATION IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2008 - 2009 WHICH THE CIT (A) RELIED HEAVILY. FURTHER, HE MENTIONED THAT THE S AID ISSUE CAME UP FOR SCRUTINY BY THE TRIBUNAL FOR THE AY 2008 - 09 WHEREIN THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. IN THIS REGARD, LD COUNSEL BROUGHT OUR ATTENTION TO PARA 3 OF THE SAID ORDER OF THE TRIBUNAL VIDE ITA NO.3100/M/2012 DATED 6.9.2013. 6. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ORDERS OF THE REVENUE AUTHORITIES AS WELL AS CITED ORDER OF THE TRIBUNAL DATED 6.9.2013 (SUPRA). ON PERUSAL OF THE SAID O RDER OF THE TRIBUNAL AND FIND THE ISSUE IS IDENTICAL I.E., DELIVERY CHARGES RECEIVED BE INCLUDED IN THE ELIGIBLE PROFITS WHILE COMPUTING DEDUCTION U/S 80IC OF THE ACT. P ARA 3 OF THE SAID ORDER OF THE TRIBUNAL IS RELEVANT HERE AND THE RELEVANT PORTION FROM THE SAID PARA 3 READS AS UNDER: 3.................CONSIDERING THE ABOVE REASONING AND IN THE ABSENCE OF ANY CONTRARY FACTS BROUGHT ON RECORD BY THE DEPARTMENT, WE HOLD THAT THE LD CIT (A) HAS RIGHTLY DIRECTED 3 THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S 80IC OF THE ACT IN RESPECT OF THE DELIVERY CHARGES BY APPORTIONING THE DELIVERY CHARGES TO MANUFACTURED GOODS AND TRADING GOODS. HENCE, WE UPHOLD THE ORDER OF LD CIT (A) AND REJECT GROUNDS OF APPEALS TAKEN BY THE DEPARTMENT. 8. CONSIDERING THE ABOVE SETT LED POSITION OF THE ISSUE, WE ARE OF THE OPINION THAT THE DECISION TAKEN BY THE CIT (A) BY FOLLOWING THE EARLIER ORDERS OF THE REVENUE IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE GROUND RAISED BY THE REVENUE IS DISMI SSED. 9. IN THE RESULT, REVENUES APPEAL IS DISMISSED . ORDER PRONOU NCED IN THE OPEN COURT ON 16 TH JULY, 2014. SD/ - SD/ - ( VIJAY PAL RAO ) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 16 /7/2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI